Alcoa Inc. share price up, net income rises, projects record Q4 aluminium sheet sales

The biggest aluminium manufacturer in the U.S. – Alcoa Inc. – shared it expects its profit from auto and aerospace components to rise in the fourth quarter of the fiscal year thanks to selling a record amount of metal to car manufacturers.

According to a statement made by Alcoa, the net income of the company over the third financial quarter increased from $24 million, or 2 cents per share, to $149 million, or 12 cents per share. Its profit, excluding one-time items, was estimated to 31 cents a share, beating analysts forecasts of 22 cents a share. Alcoas sales rose by 8.2% and reached $6.24 billion, surpassing the $5.84 billion average estimate.

Alcoa has recently changed its focus on manufacturing components and alloys. In addition, it believes that it would manage to deliver a record amount of aluminium sheet this quarter to car manufacturers, which will lead to almost doubling the units earnings.

Alcoa is drawing benefits from its past efforts to shut down unprofitable factories in high-cost areas such as Australia. The capacity of the company has been reduced by 1.2 million tons, which amounts to about 28% of Alcoas total production capacity, over the past seven years. The company also shared that it expects its after-tax operating income in its engineered products unit to increase by between 8% and 12% over the quarter in comparison to a year ago.

The U.S.-based company has been trying to bolster its positions on the market, which led to opening its low-cost Maaden joint venture located in Saudi Arabia. The joint venture started commercial operations on September 1st and is considered to be already adding to Alcoas profits.

The Chief Executive Officer of the company – Mr. Klaus Kleinfeld commented for the Financial Times: “We want to get to where we make money independent of where the metal price is: sometimes more, sometimes less. Europe is slowing down a little bit, but it is not falling off a cliff, and Asia also is slowing a little bit but is still reasonably strong.”

According to Kleinfeld, Europe and Asia are showing signs of a slowdown, but the U.S.-based company maintained its projection that the world aluminium market would expand by 7% in 2014.

Alcoa Inc. settled 0.75% higher at $16.07 per share on Wednesday in New York, marking a one-year change of +102.39%. The company is valued at $18.92 billion. According to CNN Money, the 17 analysts offering 12-month price forecasts for Alcoa Inc. have a median target of $17.00, with a high estimate of $24.50 and a low estimate of $11.00. The median estimate represents a +5.79% increase from the last price of $16.07.