Aluminum producer Alcoa Inc. reported better than expected earnings on Tuesday, as strength at the unit that sells auto parts and other complex items helped offset lower metal prices.
The engineered products business, which sells cast metal items such as wheels and bolts, has proved more profitable recently than selling less processed metal at rock-bottom prices.
But operating results also improved in the hard-hit primary metals business, thanks to productivity gains. After-tax operating income was $8 million in that segment, compared with a loss of $14 million a year earlier.
The company bumped up its global aluminum demand forecast for the heavy truck and trailer market to between 5 percent and 9 percent this year from 3 percent to 8 percent, citing improvements in Europe and China.
"As the trucking companies try to take weight off of big trucks and also trailers, and use engineered aluminum, that really seems to be paying off here," said Tim Ghriskey, chief investment officer at Solaris Asset Management.
Net income attributable to Alcoa was $24 million, or 2 cents a share, compared with a loss of $143 million, or 13 cents, a year earlier. Sales slipped to $5.77 billion from $5.83 billion.
Excluding restructuring charges and other special items, earnings rose to $120 million, or 11 cents a share, from $32 million, or 3 cents.
Analysts, on average, had been expecting earnings of 5 cents a share, according to Thomson Reuters I/B/E/S.
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