It is worth noting that the earnings per share estimate was moved up to $0.25 from $0.24 over a week ago, while it was closer to $0.23 about 90 days ago.
The aluminum giant projected a strong year for global aerospace sales — to increase 9% to 10%. Automotive production and sales are expected to rise in the range of 2% to 4%, driven by replacement demand and low lending rates in North America.
Alcoa also projected that global aluminum demand would grow by another 7% in 2015, compared to what it had grown in 2014.
Fourth-quarter after-tax operating income for Alcoa’s business segments was reported as:
- Engineering Products and Solutions: $165 million, down 2% year over year
- Global Rolled Products: $71 million, compared to $21 million in the fourth quarter 2013
- Alumina: $178 million, up from $70 million in the same period last year
- Primary Metals: $267 million, up $302 million from -$35 million year over year
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Klaus Kleinfeld, Alcoa’s chairman and CEO, commented on the year:
As we built out our value-add businesses, we gained profitable share across exciting downstream growth markets and captured aerospace and automotive growth in the midstream. On the commodity side, our hard work reshaping the portfolio continues to pay off with improved performance for the 13th quarter in a row. In 2014 we delivered Alcoa’s strongest operating results since 2008; we enter 2015 on solid footing, poised to continue transforming and growing.
The most recent analyst call was from Nomura, upgrading Alcoa to a Buy rating from Neutral and raising its price target to $23 from $15. There are a few things about this upgrade to consider. First, it has an implied an upside of 42.2% from Monday’s closing price. Also this analyst call came out the day earnings were released, signaling some strong optimism. Nomura’s target was short of the highest analyst price target of $25.50, which implied an upside of 57.7%.
Shares of Alcoa closed Monday up 0.4% at $16.17. Following the release of the earnings report, shares were up over 1% at $16.36 in post-market trading.
The company’s stock has a consensus analyst price target of $18.72 and a 52-week trading range of $10.05 to $17.75. Alcoa’s market cap is $19 billion.
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