Alcoa slumps as earnings miss expectations

Alcoa shares slumped in pre-market trade after the aluminium giant’s third-quarter earnings and revenue fell short of analysts’ expectations.

The group reported net earnings of $166m or $0.33 a share, up from $44m and $0.06 in the third quarter of last year, as the company cut costs and thanks to lower income tax provisions. This helped to offset weaker revenue, mainly due to the curtailing or closure of some of its traditional smelting operations and on the back of pricing pressures.

Excluding special items, EPS came in at $0.32 from $0.21 but revenue declined to $5.2bn from $5.57bn. Analysts had been expecting earnings of $0.33 and revenue of $5.3bn.

Chairman and chief executive officer Klaus Kleinfeld said: “Alcoa steered steady and showed resilience in spite of near-term market challenges.

“Profits grew in the combined Arconic segments, and Alcoa Corporation segments managed successfully to stay profitable in a low pricing environment. Productivity across the portfolio was exceptional, and paired with non-essential asset sales, further strengthened our cash position. “

At the start of next month, Alcoa will split itself in two, separating its raw-aluminium operations – which will keep the name Alcoa Corp – from its value-added businesses, which will be brought together in a group called Arconic.

At 1340 BST, the shares were down 4.3% in pre-market trade to $30.15.