Alcoa Sets Quarterly Records
Alcoa’s second-quarter income from continuing operations totaled $326 million—a jump of 138 percent compared to the year-ago quarter and up 6 percent from the previous quarter. The New York-based aluminum giant reported second-quarter revenue of $6.6 billion, up 27 percent from the year-ago quarter and 11 percent from first-quarter 2011.
“We turned in another strong quarter, with solid revenue and earnings growth,” said Alcoa Chairman and CEO Klaus Kleinfeld. “Across the company, our team is delivering outstanding results through our constant focus on execution and by reinventing what customers believe is possible through innovation.”
The sequential increase in income from continuing operations was driven by higher quarterly revenue (up 11 percent), higher alumina shipments (up 8 percent) and higher realized pricing for both alumina (up 7 percent) and aluminum (up 6 percent). This was somewhat offset by a weaker U.S. dollar, along with higher energy and materials costs, the company said.
Both Alcoa’s Flat-Rolled Products and Engineered Products and Solutions segments turned in record quarterly performances. Flat-Rolled Products set a record for adjusted EBITDA at $193 million, while Engineered Products and Solutions’ 19 percent adjusted EBITDA margin was an all-time quarterly best, the company said.
For the first half of 2011, Alcoa’s revenues totaled $12.5 billion, up 25 percent over the first half of 2010. Income from continuing operations in the first half of 2011 hit $635 million, compared to a loss from continuing operations of $57 million in the first half of 2010. Net income in the first half of 2011 was $630 million.
Looking ahead, Alcoa projects continued growth in all major end markets on a global basis, including aerospace (7 percent), automotive (4-8 percent), commercial transportation (7-12 percent), packaging (2-3 percent), building and construction (1-3 percent), and industrial gas turbines (5-10 percent). For the year, Alcoa projects aluminum demand to grow 12 percent on top of the 13 percent growth seen in 2010.
“Although the economic recovery is uneven, the overall outlook for Alcoa, and for aluminum, remains positive. Demand for aluminum continues to rise and so does growth in our major markets. These factors support our projection that aluminum demand will grow 12 percent this year and will double by 2020,” Kleinfeld said.