Post-Earnings Analysis - Alcoa
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LONDON, October 10, 2014 /PRNewswire/ --
Investor-Edge.com has issued free post-earnings analysis on Alcoa Inc. (NYSE: AA). On October 08, 2014, the company reported its financial results for Q3 FY14 (period ended September 30, 2014). Click on www.investor-edge.com/FreeReports to read our free earnings review on Alcoa. During Q3 FY14, Alcoa Inc.'s revenue grew 8% Y-o-Y and its diluted EPS increased $0.10 from the preceding year quarter. Our free coverage report can be accessed at:
www.investor-edge.com/register
Earnings Overview
Alcoa Inc.'s revenue during the reported quarter increased to $6.24 billion, from $5.77 billion in Q3 FY13. The company's Q3 FY14 revenue exceeded Bloomberg analysts' estimates of $5.84 billion. The company said that nearly half of the Y-o-Y growth in revenues resulted from organic growth. Further, favorable metal pricing and higher energy sales also contributed to the company's revenues. The free research on AA can be downloaded as in PDF format at:
www.Investor-Edge.com/AAFreeReport
During Q3 FY14, Alcoa Inc.'s Engineered Products and Solutions segment delivered a record quarterly after-tax operating income (ATOI) of $209 million, marking the 18th consecutive quarter of Y-o-Y ATOI growth. The company also reported a record adjusted EBITDA margin of 23.5% in the quarter. The company's Global Rolled Products segment reported an ATOI of $103 million in Q3 FY14, an increase of 45% on Y-o-Y basis. Further, ATOI from the company's Primary Metal segment rose significantly to $245 million in Q3 FY14, from $8 million in the year ago quarter. However, ATOI from Alcoa Inc.'s Alumina segment decreased by $5 million Y-o-Y to $62 million in the reported quarter.
During Q3 FY14, net income attributable to Alcoa shareholders broadened to $149 million or $0.12 per diluted share, from $24 million or $0.02 per diluted share in the previous year quarter. Alcoa Inc.'s reported quarter net income outperformed Bloomberg analysts' forecast of $50 million or $0.04 per diluted share. Excluding the impact of special items, the company's net income during the reported quarter more than tripled to $370 million or $0.31 per share, from $120 million or $0.11 per share in Q3 FY13. Sign up and read the free analyst's notes on AA at:
www.Investor-Edge.com/AA-10102014
Klaus Kleinfeld, Chairman and CEO of Alcoa, referred to the reported quarter as a clear data point to show that Alcoa's transformation is delivering. The company's downstream business again achieved historically high profitability, the midstream maintained disciplined cost control while capturing growth, and Primary Metals performed at levels not seen since before the downturn, he said. Further, he attributed the strong quarter to Alcoa's intense focus on repositioning its portfolio.
During the reported quarter, Alcoa Inc. delivered $306 million in productivity gains, primarily driven by process improvements and procurement savings across all segments; and managed growth capital expenditures of $325 million, much below its $500 million annual target and controlled sustaining capital expenditures of $425 million compared to its annual plan of $750 million. Visit Investor-Edge and access the latest research on AA at:
www.Investor-Edge.com/AAEarningsCoverage
In its guidance for full year FY14, Alcoa continues to expect global aerospace sales growth of 8% to 9%, driven by robust demand for both large commercial aircraft and regional jets. The company tightened its FY14 projection for global automotive production growth to 2% to 4%, from a previous range of 1% to 4% in Q2 FY14. Alcoa Inc. continues to expect global packaging sales growth of 2% to 3% and global building and construction sales growth of 4% to 6% in FY14. Further, for the industrial gas turbine market, the company continues to predict a decline of 8% to 12%, on account of lower orders for new gas turbines and spare parts.
Further, Alcoa Inc. increased its FY14 estimate of production growth for the North America commercial transportation market to a range of 16% to 20% from a previous range of 10% to 14% in Q2 FY14, and from 5% to 9% in Q1 FY14. Globally, Alcoa continues to expect a flat commercial transportation market of (-1%) to 3% in FY14 due to ongoing weakness in the European market.
Stock Performance
A day after the earnings release, on October 09, 2014, Alcoa Inc.'s stock took a beating of 4.23% and ended the session at $15.39. The stock vacillated between $15.17 and $16.43 during the trading session. A total of 55.69 million shares were traded, which was significantly above its three months average volume of 18.12 million shares. Over the previous three trading sessions and over the last one month, the company's shares have declined 3.75% and 10.05%, respectively. However, the stock has surged 44.78% from the beginning of 2014. Alcoa Inc.'s shares are trading above their 200-day moving average. Further, the stock's 50-day moving average of $16.35 is greater than its 200-day moving average of $13.83. The stock traded at a PE ratio of 26.02 and has a Relative Strength Index (RSI) of 49.33.
Sneak Peek to Corporate Insider Trading
In the last one month, Alcoa Inc. has reported seven transactions by seven insiders on a single day. On October 01, 2014, seven insiders of Alcoa Inc. purchased a total of 15,919 shares of the company worth $252,714.15 at an average price of $15.88 per share. Complimentary in-depth research on AA is available at:
www.Investor-Edge.com/AAInsiderTrading
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