Alcoa Beats Q4 Estimates Amid Auto, Aerospace Growth
By JAMES DETAR , 2015-01-13 09:51:04
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Alcoa (NYSE:AA) reported strong earnings growth late Monday as it fired on all cylinders, reporting robust sales in autos and aerospace.
The metals giant earned 33 cents per share in Q4, up from 4 cents a year ago, beating consensus of analysts polled by Thomson Reuters for 29 cents a share. Revenue grew 14% to $6.38 billion, above Wall Street's $6.04 billion target.
Shares climbed 1.2% in late trading on the stock market today.
Alcoa forecast that U.S. auto production will rise 2% to 4% this year on replacement demand and growing auto sales in China. Packaging is seen growing 2% to 3%, and the aerospace sector will take flight with 9% to 10% growth amid rising air travel.
"Our strong fourth quarter capped a pivotal year as we significantly accelerated Alcoa's transformation," CEO Klaus Kleinfeld said in a statement.
Sterne Agee analyst Josh Sullivan told IBD the beat was on a combination of cost-cutting and growth in primary market sales.
"They saw record shipments of auto flat roll aluminum and are also benefiting from higher metal prices and strong productivity," Sullivan said.
Alcoa rose early Monday, prior to the earnings report, after Nomura upgraded its stock to buy from neutral and raised its price target 23% to 23 per share, citing stable profits in packaging and expected continued strength in autos.
The metals maker saw strong growth as Ford Motor (NYSE:F) rolled out an all-aluminum body for its 2015 F-150 pickup.
Meanwhile, the aerospace sector is also turning to light, strong aluminum and other metals, which gave Alcoa a lift.
Boeing (NYSE:BA), for example, uses Alcoa aluminum in its technologically advanced 787 Dreamliner, Boeing's most fuel-efficient jetliner and the industry's first to use composite materials in its airframe.
Alcoa recently unveiled plans to double its jet engine coating technology capacity at its Whitehall, Mich., plant. During Q4, Alcoa completed its purchase of jet parts maker Firth Rixson and announced the buyout of aerospace parts maker Tital.
