Alcoa posted mixed results today, as the company beat revenue expectations but missed earnings forecasts by seven cents.
Revenue at the aluminium giant grew 21% to $6.42 billion. Wall Street consensus was for sales of $6.23 billion.
Income from operations grew 182% from 2010, but fell 47% sequentially to $172 million, or $0.15 per share. Profits were impacted by steep declines in commodity prices, including aluminium’s near 20% drop during the quarter.
Commercial transportation drove revenue; the unit posted 44% sales growth. Increases in automotive and packaging divisions of 26% and 21%, respectively, buoyed the firm as well. Backlogs remain strong across the group.
Citi Analyst Brian Yu lowered earnings expectations before Alcoa’s announcement today, but results still missed his below consensus guidance.
“Despite the drop in aluminium prices, input cost pressures have yet to recede,” Yu said. “Spot caustic soda prices climbed during 3Q. On the positive side, the stronger US dollar should lower international production costs.”
Management continues to forecast 12% global aluminium demand growth. “Increasing demand in China, where the Company has raised its 2011 growth projection two-percentage points to 17 per cent, will mostly offset declines in Europe and other regions,” the company said in a statement.
Analysts were looking to the bell weather to gauge if disappointing economic data in August and September would hamper overall earnings as the season got underway.
“We expect Alcoa to start the 3Q earnings season on a somber tone, given recent weakness in lead indicators, particularly in Europe,” Morgan Stanley analyst Paretosh Misra said last week.
Shares were down as much as 5% in after hours trading.