Alcoa reports solid second quarter result despite dwindling metal prices

Lightweight metals leader Alcoa has reported solid second quarter 2015 results on July 9, 2015 as the Company’s transformation showed strong progress. Profitability from Alcoa’s growing aerospace and automotive businesses increased year-over-year as mid and downstream investments delivered positive impact. In the upstream, the Primary Metals business was resilient in the face of market headwinds and the Alumina business delivered its strongest first half results in eight years. The Company’s portfolio reshaping is driving results.

Alcoa reported second quarter 2015 net income of $140 million, or $0.10 per share, including $143 million in restructuring-related charges, primarily to optimize the Company’s upstream portfolio. Year-over-year, second quarter 2015 results compare to net income of $138 million, or $0.12 per share, in second quarter 2014.

Excluding special items, second quarter 2015 net income grew to $250 million, or $0.19 per share, up 16 percent from $216 million, or $0.18 per share, in the year-ago period. Profitability increased even as the Midwest transaction price declined $527 per metric ton, or 22 percent, year-to-date through June 30, demonstrating the benefit of a reshaped portfolio.

Second quarter 2015 revenue rose to $5.9 billion, from $5.8 billion in second quarter 2014, up 1 percent year-over-year. Organic growth in aerospace, automotive and alumina, combined with acquisitions, grew second quarter revenue by 12.7 percent. This profitable growth more than offset an 11.7 percent decline in revenue caused by closing and divesting lower-margin businesses and market headwinds. This revenue shift reflects how the Company’s transformation is driving the portfolio to higher profitability.

“We continue to transform Alcoa; our portfolio reshaping combined with smart investments in growth markets is delivering strong results,” said Klaus Kleinfeld, Chairman and Chief Executive Officer. “Our value-add businesses are outperforming, with record profitability in the downstream and exciting profitable growth in the midstream. Recent acquisitions are fully on track, and paired with our innovations we are cementing Alcoa’s position as a premier aerospace and automotive partner. In the upstream, our Alumina business delivered its best first half since 2007 and our lower cost metals business showed resilience in the face of strong market headwinds. Productivity and cash generation were excellent.”