Alcoa Swings to Q2 Profit, Boosts Aluminum Demand Outlook (AA)

Filed in alcoa, ceo, dividend, earnings, euro, Gold, Gold Investment, shares by on July 13, 2010 0 Comments

Aluminum producer Alcoa Inc. ( AA ) late Monday said it swung to a second quarter profit, beating expectations, and raised its estimates for aluminum consumption. The Pittsburgh-based company reported fiscal second quarter net income of $136 million, or 13 cents per share, compared with a net loss of $454 million, or 47 cents per share, in the year-ago period. On a continuing operations basis, earnings were $137 million, or 13 cents per share. Revenue surged 22% from last year, to $5.2 billion. On average, Wall Street analysts expected a smaller profit of 11 cents per share, on lower revenue of $5.05 billion. Looking ahead, the company said it expects aluminum demand to rise as a result of strong fundamentals. Alcoa CEO Klaus Kleinfeld said he sees an average demand growth rate of 6% per year, noting “You see robust consumption growth in places like China, Brazil, India, modest increases in North America and Europe. There’s a lot of very positive indications there of a real recovery in almost all of these markets … but I believe that the biggest risk is still the volatility that could potentially come from financial markets.” Alcoa shares rose 38 cents, or +3.5%, in premarket trading Tuesday. The Bottom Line We had removed shares of AA from our “recommended” list July 2, 2008 when the stock traded at $32.11. The company has a dividend yield of 1.10%, based on last night’s closing stock price of $10.87. The stock has technical support in the $9-$10 price area. If the shares can firm up, we see overhead resistance around the $12-$13 price levels. We are watching the shares closely, but would remain on the sidelines for now. Alcoa Inc. ( AA ) is not recommended at this time, holding a DARS™ Rating of 3.3 out of 5 stars. Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

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Alcoa Swings to Q2 Profit, Boosts Aluminum Demand Outlook (AA)

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