Alcoa Corp. (NYSE:AA) delivered an earnings beat on Monday along with a brighter outlook for 2017 that sent its shares up by as much as 5.08% upon market close.
First-Quarter Result
In the three months that ended in March, the company’s profits jumped to $255 million or $1.21 per share compared to last year’s losses at around $210 million during the same period. Alcoa was able to beat consensus analysts estimates of 53 cents EPS, delivering an earnings of 63 cents per share.
Despite the earnings beat, Alcoa missed revenue expectations of $2.96 billion reporting only $2.66 billion.
In a press release, Alcoa CEO Roy Harvey stated that the company is off to a strong start with their first full quarter as an independent company.
Alcoa, which separated from Arconic (NYSE:ARNC) last year, is known for their production of aluminum, alumina and bauxite. Arconic and Alcoa came in the middle of a long argument with investor Elliott Management who has attacked the company’s corporate team in terms of their expenses and management.
Roy Harvey assured that that company has started with a healthy balance sheet and cash on hand as Alcoa has begun to return seeking capital across all fields of their business as this would reduce complexity. Harvey also stated in the press release that the management has focused heavily in their strategic priorities and is looking forward to delivering value to their stockholders for the rest of the year.
The company’s business units and administrative locations from around the world have also been consolidated to cut costs while the company has moved its corporate headquarters from New York back to Pittsburgh. According to Alcoa, this should generate at least $5 million in annual savings.
For the rest of the year, the company forecasted aluminum demand to rise by around 4.5% to 5% but has projected a fair global aluminum surplus of around 300,000 metric tons to 700,000 metric tons.
"In our Bauxite segment, our third-party business remained strong and we continued to grow profits, while our Alumina and Aluminum segments captured the benefits of improved market pricing to increase earnings substantially." Harvey added.
Alcoa Stock
Alcoa shares rose 5.08% to $33.31 on Monday before gaining 2.3% more during the after-hours trading to $34.06 following the company’s earnings beat. The stock has previously closed from $31.70. Shares of the company have risen by almost 19% this year.