bloomberg
Alcoa Inc., the largest U.S. aluminum producer, reported third-quarter profit that topped analysts’ estimates as demand for the industrial metal increased.
Earnings excluding certain items were 9 cents a share, topping the 5-cent average estimate of 16 analysts surveyed by Bloomberg. Net income fell to $61 million, or 6 cents a share, from $77 million, or 8 cents, a year earlier, New York-based Alcoa said today in a statement. Sales climbed 15 percent to $5.3 billion.
Aluminum for delivery in three months averaged 15 percent higher in the third quarter than a year earlier on the London Metal Exchange while global inventories fell 3.3 percent. A weaker dollar is improving the affordability of commodities in countries with stronger currencies, said Anthony Rizzuto, a New York-based analyst at Dahlman Rose & Co.
“We’ve already seen metal prices performing better, and I expect that inertia will continue through the end of the year,” Rizzuto, who rates the shares “hold,” said in a telephone interview before the release.
Alcoa, the first company in the Dow Jones Industrial Average to announce quarterly earnings, fell 17 cents, or 1.4 percent, to $12.20 at 4:00 p.m. in New York Stock Exchange composite trading.
Alcoa smelts aluminum and refines alumina, a raw material used to make the metal, in Australia, Europe and Brazil. The Australian dollar climbed 15 percent against its U.S. counterpart in the third quarter, the second-largest gain among a basket of 16 major currencies tracked by Bloomberg. The euro was third, strengthening 11 percent, while the Brazilian real climbed 7 percent.
Alcoa also may see higher demand because some Chinese aluminum smelters have been ordered to cut production to meet energy-usage requirements, said Charles Bradford, a partner at Affiliated Research Group LLC, a New York-based consulting firm.
Aluminum prices on the LME averaged $2,110 a metric ton in the third quarter compared with $1,836 a year earlier. Global stockpiles monitored by the LME, the world’s largest metals bourse, fell 0.1 percent to 4.34 million tons today.