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Aluminum producer Alcoa reported better than expected second quarter earnings on Wednesday with a narrower-than-expected loss but raised concerns about demand, and the implications for the global economy with the Trade War affect and tariffs.

Alcoa Smelting

Alcoa Corp NYSE: AA Reported Earnings After Close Wednesday

($0.01) Beat ($0.19) EPS AND $2.7 Billion Matched $2.7 Billion Forecast in Revenue

Earnings

Alcoa said it lost $402 million, or $2.17 a share, in the second quarter, versus earnings of $10 million, or 5 cents a share, in the year-ago period. Adjusted for one-time items, the company lost $2 million, or a penny a share, versus earnings of $1.17 a share a year ago.

Revenue fell to $2.7 billion from $3.6 billion a year ago. Analysts polled by FactSet had expected an adjusted loss of 19 cents a share on sales of $2.7 billion. ;

Alcoa Corp NYSE: AA

Market Reaction After hours $22.53 −0.62 (-2.68%)

Highlights

 

Outlook

Alcoa said it estimates global aluminum demand growth for 2019 between 1.25% and 2.25% this year, down from a previous estimate of growth between 2% and 3%. This is a result of “lower demand in both China and the world ex-China due to trade tensions and macroeconomic headwinds,” AA said in a statement. This is also against a backdrop of Aluminum inventories as measured by days of consumption continue to decline and are expected “to reach levels not seen in more than a decade, since before the global financial crisis in 2008” this year, the company said. Alcoa continues to expect an aluminium deficit and an alumina surplus for 2019. For bauxite, it upped its expectations of a global surplus, to between 13 million and 17 million metric tons, an increase from the previous quarter’s full-year estimate of 8 million to 12 million metric tons. That increase is due to higher production in Guinea and Southeast Asia, only partially offset by higher demand in China, Alcoa said.

Alcoa Corporation $AA is a global leader in bauxite, alumina, and aluminum products. The stock had been rising on protectionist hopes as the Trump administration mulls curbs of imports on national security grounds. The tariff war has changed the dynmaics of such a hope. hese were just the second year of results since AA split off it's aerospace division. Alcoa is a harbinger for many in the commodities and global growth sectors.

Source: Alcoa

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