Alcoa Beats Earnings, Revenue Expectations for Third Quarter

Alcoa beat expectations for both earnings and revenue for the third quarter, as the aluminum giant symbolically kicked off earnings season moments ago with some surprise good news.

Forecasters had expected Alcoa to report a loss of 9 cents per share in the third quarter and return to profitability in the fourth quarter.

But the company reported a profit of 4 cents per share on $4.62 billion in third-quarter revenue, higher than the $4.55 billion in revenue forecast. It was the company's first profitable quarter in a year.

Revenue is down 33 percent from the third quarter of 2008 but up 9 percent from the second quarter of this year. The company was actually able to raise the price it charges for aluminum in the quarter. Alcoa expects aluminum consumption to rise 11 percent in the second half of this year, a sign that manufacturing is picking up.

Comparing sales in the first half of this year to the second half, Alcoa predicts global revenue will be up 5 to 10 percent, rising 10 to 15 percent in North America, 5 to 10 percent in China but dropping 10 to 15 percent in Europe.

"China is clearly back and back very strong," Alcoa chief executive Klaus Kleinfeld said on CNBC moments ago. He added he is seeing signs of "stabilization" in the U.S.

This is a critical earnings season, as companies report their third-quarter results in coming days. I wrote about this earlier, which you can read by clicking here. Three-quarters of companies beat earnings estimates last quarter by cutting costs, but only half beat revenue estimates. That's what the third quarter will tell us: whether businesses are back to business.

The markets were mixed today awaiting Alcoa's earnings. The S&P 500 and the Nasdaq both finished up slightly on the day, while the Dow was just below even for the day.

Gold continues its spike, trading up over $1,044 per ounce, an all-time high, as the dollar continues to sink and draw international scorn, which I wrote about in today's Post. You can read that story by clicking here.

-- Frank Ahrens
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