Shares of aluminum giant Alcoa Inc. (NYSE: AA
) gained in afterhours trading on Tuesday after the company, following closing bell, reported big leap in fiscal fourth-quarter profits, as demand for raw aluminum picked up and improved sales in higher-margins aerospace business along with cost-cutting measures bolstered the bottom line in spite of 12% drop in prices.
Alcoa, which is world’s largest aluminum maker, is regarded as economic bellwether since it supplies aluminum products to wide variety of industries.
The company reported net profit of $242 million or 21 cents a share against a loss of $191 million or 18 cents a share, in the year earlier quarter.
Excluding sales of assets, net earnings (Non-GAAP method) stood at $64 million or 6 cents a share, compared to a loss of $34 million or 3 cents a share, in the corresponding period of last year.
Commenting over the results, Alcoa’s Chief Executive, Klaus Kleinfeld said to analysts and investors in a conference call, “ (The Company)overcome volatile metal prices and global economic instability."
The Company also lifted its outlook on global aluminum demand in 2013. Alcoa now expects 7 percent growth in demand, up from its average growth forecast of 6.5 percent for the long-term. Nonetheless, the growth outlook is way below the 2011 level of 10 percent and 2010 level of 13 percent.
“We enter 2013 in a strong position to maximize profitable growth,” added Klienfield.
Kleinfeld also said that demand in China was picking up as economic growth, having remained stagnated in 2012 was showing signs of recovery while the Europe’s economy was performing better than most people anticipated. Moreover, the U.S. automobile and aerospace markets were also doing well, said the Chief Eceutive.
Shares edged up 1.10 percent in afterhours trading on Tuesday.