ALCOA Brings In Surprise Profit (AA)

Aluminum giant and Dow Jones Industrial Average component Alcoa Inc. (NYSE: AA) has just kicked off earnings season for the Q3-2009 period.  Shares were halted ahead of the earnings report.  The company posted a surprise positive earnings of $0.04 EPS outside of items (and listed as $0.07 EPS from operations) and $4.6 billion in revenue.  Thomson Reuters was expecting a drop of 125% on earnings to -$0.09 EPS and $4.55 billion in revenue.   Revenues are down from $7 billion a year ago, but this is a sequential gain from $4.2 billion seen in Q2-2009.

The company seems to have been in a restructuring and repositioning for an eternity, and the company has further updated its progress on this front.  The company said that financial and operational measures taken in the first half of the 2009 are having a strong positive impact on cash and profitability, and further noted that it is in excellent shape to benefit when the market recovers.  Further noted was that the company is surpassing all targets in the cash sustainability program.

Cash generated from operations was $184 million in the quarter and it ended with some $1.1 billion in cash on the books.

Again, shares are halted, but the stock closed up 2.2% at $14.20 on the day.  Alcoa’s 52-week trading range is $4.97 to $18.94, but this was briefly a $40 stock back in early summer of 2008.

JON C. OGG
OCTOBER 7, 2009