Alcoa, the largest US aluminum producer, reported better-than-expected quarterly earnings after its smelting business returned to profitability and results improved at a unit that makes auto and aerospace parts.
Third-quarter net income excluding plant-closing costs and other one-time items was 11 cents a share, New York-based Alcoa said in a statement today.
The engineered products division, a supplier of aerospace companies such as Boeing and Airbus SAS, saw after-tax operating income rise 22 per cent to $192 million (€142 million), while the primary metals business earned $8 million.
Alcoa’s so-called downstream divisions -- which make rolled, forged and extruded aluminum products - have accounted for a growing proportion of the company’s revenue in the past year.
They're the focus of efforts by chairman and chief executive Klaus Kleinfeld to reorient Alcoa to capitalize on rising demand for high-tech components in the latest generation of cars and commercial aircraft.
“You see the increased importance of the downstream business and the continued growth and profitability,” Mr Kleinfeld said today. “The share price is undervalued and has not built in the repositioning that we are undergoing but I believe it will get there.”
The shares rose 1.5 per cent to $8.06 at 6.52 pm after the end of regular trading in New York.
Bloomberg
