January 12, 2015 / 9:41 PM / 5 years ago

UPDATE 2-Alcoa swings to profit, sees strong demand for aerospace

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By Nick Carey

CHICAGO, Jan 12 (Reuters) - Metals company Alcoa Inc on Monday reported higher-than-expected quarterly profit, swinging from a year-earlier loss due to a boost from automotive demand, higher aluminum prices and lower energy costs.

Alcoa also forecast solid demand this year for its aerospace and automotive products.

The New York-based company has been investing in more advanced aerospace and automotive products, while selling off some of its more traditional yet costly smelting facilities.

“Our strong fourth quarter capped a pivotal year as we significantly accelerated Alcoa’s transformation,” Chief Executive Officer Klaus Kleinfeld said in a statement.

Alcoa reported a net profit of $159 million versus a loss of $2.3 billion a year earlier. Excluding restructuring costs, Alcoa’s net profit was $432 million.

Alcoa said its restructuring costs in the fourth quarter totaled $200 million.

Earnings per share were 11 cents, compared with a loss per share of $2.19 in the fourth quarter of 2013. Excluding restructuring costs, earnings per share for the latest quarter totaled 33 cents, beating Wall Street analyst forecasts of 27 cents.

Revenue was $6.4 billion, above analyst expectations of $6.03 billion.

In the fourth quarter, Alcoa sold off stakes in smelting operations as part of its move away from its higher-cost, traditional bread-and-butter business. But the after-tax operating income at its aluminum business almost tripled as aluminum prices rose and Alcoa benefited from a stronger U.S. dollar and declining energy costs in an energy-intensive business.

As part of its continued investment in specialized products, the company announced in mid-December it was buying TITAL, a German maker of titanium and aluminum structural castings for aircraft engines and airframes.

Alcoa said it expects global aerospace sales to rise between 9 and 10 percent in 2015 and expects global automotive production to rise between 2 and 4 percent, driven by replacement demand and demand in China.

In after-market trading, Alcoa shares were up more than 1 percent at $16.40.


here (Reporting by Nick Carey; Editing by Marguerita Choy, Leslie Adler and David Gregorio)

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