U.S. Markets closed

Alcoa (NYSE: AA) earnings spark optimism on markets

Vancouver BC (Baystreet.ca) -- It is one of the first harbingers this year that maybe things are picking up with the world economy, and one of the brightest. With projections that the aluminum market is on not only the mend, but the march, Dow component Alcoa Inc. (AA) treated the investment world to a story of solid earnings in the final quarter of fiscal 2012.

Helped largely by healthy cost-cutting, the company chimed in with $242 million U.S. worth of net income, or 21 cents per share, in Q4, compared to a net loss of $191 million, or 18 cents per share, to conclude fiscal 2011.

Alcoa also reported that sales for the quarter came in at $5.89 billion U.S., triumphing over analysts’ expectations, but down 1.5% from the year-ago quarter as the average realized price per tonne of aluminum fell slightly.

For the full year, Alcoa reported income from continuing operations of $191 million U.S., or $0.18 per share, compared with $614 million, or $0.55 per share, in 2011. Year-on-year, aluminum prices fell 12%, impacting the market by about $1 billion U.S.

Some of aluminum’s most frequent users dwell in the aerospace, automotive and construction areas, and Alcoa told investors it expects global aluminum consumption growth of 7% in 2013, up slightly from 6% in 2012, and a doubling of global aluminum demand between 2010 and 2020.

The company press release announcing the great financial tidings carried on thus: "Through a disciplined approach to capital spending and focus on liquidity in the past four years, the Company has generated $5 billion (U.S.) in productivity gains, reduced working capital by 19 days, contributed stock to the pension plan two of the last four years, and successfully monetized assets."

Alcoa claims to be the inventor of the aluminum industry as we know it, and boasts a status as the world's leading integrated aluminum company, providing jobs to 61,000 employees across 30 countries.

"Alcoa innovation," so says its website, "has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics and industrial markets."

Alcoa shares closed Friday’s trading at $8.94 U.S., down three cents from the day before, within a 52-week range of $7.97 U.S. to $10.92.