This is what the market expects out of Alcoa, naturally guided lower in the past week.
And here are the full results:
- EPS: $0.32; consensus of $0.325, and $0.355 4 weeks ago
- Revenue: $6.59Bn; consensusof $6.31Bn
- Fress Cash Flow: $526 MM
- Reaffirms forecast for 12% global aluminum demand growth. Unclear if this forecast anticipates SHIBOR at 6%.
- Income from continuing operations of $326 million, or $0.28 per share, up 138 percent compared to second quarter 2010; excluding negative impact of special items, income from continuing operations of $364 million, or $0.32 per share
- Revenue of $6.6 billion, up 27 percent over second quarter 2010 and 11 percent over first quarter 2011
- Record profitability in mid- and down-stream businesses
- Cash from operations of $798 million
- Free cash flow of $526 million
- Debt-to-capital ratio of 32.6 percent and cash on hand of $1.3 billion
- Reduced days working capital from 43 in second quarter 2010 to 37
- Reaffirm projection for 12 percent growth in global aluminum demand for 2011
NEW YORK--(BUSINESS WIRE)--Alcoa’s (NYSE: AA) second quarter 2011 income from continuing operations jumped 138 percent compared to a year ago on growing revenue, record quarterly alumina revenue and record mid- and down-stream performance, the Company announced today.
Income from continuing operations was $326 million for second quarter 2011, or $0.28 per share. Excluding the negative impact for special items of $38 million, income from continuing operations was $364 million, or $0.32 per share.
Second quarter 2011 income from continuing operations was up 138 percent from second quarter 2010 income of $137 million, or $0.13 per share, and up 6 percent from first quarter 2011 income of $309 million, or $0.27 per share.
Net income for second quarter 2011 was $322 million, or $0.28 per share, compared to net income in second quarter 2010 of $136 million, or $0.13 per share, and net income in first quarter 2011 of $308 million, or $0.27 per share.
“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.
“Although the economic recovery is uneven, the overall outlook for Alcoa - and for aluminum - remains positive,” Kleinfeld said. “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.”
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), along with improved productivity and continued strong growth in major markets served by mid- and down-stream businesses. This was somewhat offset by a weaker U.S. dollar, along with higher energy and materials costs.
Special items in second quarter 2011 included costs associated with restructuring and Alcoa’s recent debt tender offers, somewhat offset by the positive impact of mark-to-market changes on certain power derivative contracts.
Revenue for second quarter 2011 was $6.6 billion, up 27 percent from the year-ago quarter and 11 percent from first quarter 2011.
Compared to first quarter 2011, end market revenue increased in packaging (13 percent), aerospace (6 percent), building and construction (12 percent), commercial transportation (16 percent), industrial products (9 percent), industrial gas turbines (8 percent) and automotive (5 percent).
For the quarter, adjusted EBITDA was $1.04 billion, up 44 percent from the second quarter of 2010 and up 9 percent from first quarter 2011.
Both Flat-Rolled Products and Engineered Products and Solutions segments once again turned in record quarterly performance. 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.
Alcoa is also well ahead of the Company’s 2011 financial targets. The Company’s debt-to-capital ratio at the end of the quarter was 32.6 percent, a 100 basis-point improvement over first quarter 2011. For the first half of 2011, capital spending was $476 million, on track at 32 percent of the 2011 target. Expenditures on the Ma’aden-Alcoa investment were also on track at $152 million, 38 percent of target. Free cash flow was $526 million in second quarter 2011, putting Alcoa on pace through the first half of the year. The Company ended the quarter with cash on hand of $1.3 billion. Days working capital were reduced from 43 in second quarter 2010 to 37 in second quarter 2011.
For the first half of 2011, revenues were $12.5 billion, up 25 percent over the first half of 2010. Income from continuing operations in the first half of 2011 was $635 million, or $0.56 per share, compared to a loss from continuing operations of $57 million, or $0.06 per share, in the first half of 2010. Net income in the first half of 2011 was $630 million, or $0.55 per share.
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. Alcoa projects that, from a 2010 baseline, aluminum demand will double by 2020 on 6.5 percent annual growth.