Alcoa (AA, Financial) reported its second quarter earnings on July 11 with the majority of publicly traded companies to follow in the next few weeks. Revenue for the company in the second quarter was $5.3 billion, down 10.2% from the comparable quarter and beating analysts’ average estimate by $100 million. Earnings for the quarter were 15 cents, which beat analysts’ estimates by 5 cents.
As the company prepares for a separation into two publicly traded companies in the second half of 2016, its earnings continued to struggle across all segments. For the second quarter, production was down in alumina and aluminum. Nearly all of its business categories also showed lower profit. Engineered products and solutions and transportation and construction solutions were the company’s most profitable businesses for the quarter. The engineered products and solutions business reported increased net income after tax of 9%. Transportation and construction solutions also reported an after-tax profit for the quarter with a gain of 5%.
As the company prepares for its separation, the market has been pricing the stock favorably. Trading at $11, the stock was up 3.89% in July 12 morning trading versus a gain of 0.49% for the Standard & Poor's 500. Year to date Alcoa’s stock is up 6.74% versus a gain of 5.07% for the S&P 500.
In a CNBC report following the company’s earnings announcement, Klaus Kleinfeld, chairman and CEO of Alcoa, gave his comments on the company’s results and its separation.
Disclosure: I do not own any shares of Alcoa.
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