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New York • Alcoa Inc. said Wednesday that its third-quarter income soared as higher aluminum prices and lower costs for raw materials boosted its core primary-metals business.
The results beat Wall Street expectations, and the company's stock rose 2 percent in after-hours trading.
Alcoa has been pivoting from its traditional role of mining and smelting aluminum to become a more diversified maker of lightweight metal and alloy products for aerospace, autos and other industries. But it was the core metals business that propelled Alcoa in the third quarter.
The primary-metals segment posted operating earnings of $245 million, up from just $8 million a year earlier. The company said that costs for the raw material alumina were lower while the price of aluminum it produced rose 16 percent. Alcoa said the division also benefited from higher productivity. The company has shuttered plants and taken other steps to cut costs.
Chairman and CEO Klaus Kleinfeld said that the primary-metals segment "performed at levels not seen since before the downturn" in 2008.
Net income was $149 million, or 12 cents per share, compared with $24 million, or 2 cents per share, a year ago. Excluding charges for restructuring and acquisitions, the company said its adjusted earnings were 31 cents per share. Analysts, who usually exclude items, expected 22 cents per share, according to FactSet.
Revenue rose 8 percent to $6.24 billion, topping the $5.86 billion forecast of analysts.
Alcoa is the unofficial opening act of earnings season. Its results are watched closely because of its role as a supplier of basic materials to many industries.
The New York-headquartered company has been increasing its focus on supply the aerospace industry and is benefiting from demand for aluminum and other lightweight materials used to make planes more fuel-efficient. Alcoa's engineered-products division had a quarterly record with operating income of $209 million, up 9 percent, and its rolled-products segment earned $103 million, a 45 percent gain.
Shares of Alcoa rose 12 cents to close at $16.07, up 51 percent so far in 2014. In after-hours trading after the earnings report, the shares were up another 33 cents to $16.40.