Alcoa Inc (AA) Surges Ahead Amid Positive Financial Results

Providing his first reactions to the Q2 2014 Alcoa Inc (NYSE:AA) earnings data, which was released yesterday after market close, analyst firm Bradford Research’s President, Charles Bradford, told CNBC in a interview  said that he was surprised by the robust earnings from the traditional sectors of the company.

Alcoa Inc (NYSE:AA)

He stated that, “actually the surge in earnings for the second quarter was not in the automobile and aerospace markets, but in the basic primary aluminium.”

Mr Bradford went on to compare the after tax operating income between the two sectors to underline his point. He called out the $112 million increase in after tax operating income that Alcoa Inc (NYSE:AA) has recorded in the Q2 from its primary aluminium commodity business, as against the relatively weaker $35 million increase in after tax, operating income from its downstream business which currently constitutes up to 75 percent of firm’s overall business. The president of the analyst firm also pointed out that the upturn in the primary business was due to the 4 percent increase observed in the price of aluminium in the international market.

On being asked if the business diversification efforts, that Alcoa Inc (NYSE:AA) has mounted in the recent past, would pay off, Mr Bradford went on to express his opinion that the ongoing diversification efforts are likely to pay off only in the longer term.

In short term “it will not be as attractive as it is being made out to be by the analyst community”.

The lack of potential to grow the business in the aerospace sector due to capacity constraints in the aerospace industry, in tandem with the U.S automobile industry current peak manufacturing loads have been sighted by the analyst guru as reasons for the expected slow expansion in the downstream sector.

For the second quarter of 2014, Alcoa Inc (NYSE:AA) has reported a net profit of $0.12 per share, which was in line with the estimates made by analysts. At the same time, the company’s revenue went up by 7% on the year and amounted to $5.8 billion.

It is interesting to note at this juncture that sceptics had started to write off Alcoa Inc (NYSE:AA) stock, after the Dow Jones Industrial Average Index decided to drop the stock in September last year. This was the first time in 54 years that this particular stock was not part of DJIA. The metal firm was replaced by Nike Inc (NYSE:NKE) on DJIA. Since being taken out of DJIA tracker, Alcoa Inc (NYSE:AA) has posted close to 90 percent gains at the browsers, where as Nike Inc (NYSE:NKE) in the same period has posted 22 percent gains.

Disclosure: none

blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The 10 Richest Stand Up Comedians in the World

The 10 Fattest Countries in the World

The 5 Best Summer Jobs for Teens

The 10 Most Religious Countries in the World Keeping the Faith

The 10 Most Educated Countries in the World

The 10 Most Popular Cell Phones in the World

The 10 Drunkest Countries in the World

The 10 Most Expensive Private Schools in the World

The 10 Smallest Countries in the World

Walking Dead Season 5 Spoilers You’ll Wish You Didn’t Know

The 10 Poorest Countries in the World

The 10 Greenest Countries in the World

The Top 10 Countries with the Highest Population in the World

The 10 Most Visited Countries in the World

The Top 10 Star Wars Characters in the Iconic Series

The 10 Most Expensive Android Phones in the World

5 Reasons Why The Illuminati Is Real and a Threat to Society

The 6 Scariest Halloween Costumes Ever Screamed At

The 4 Biggest Hedge Fund Managers in the World Today

The 15 Most Densely Populated Countries in the World

The 10 Biggest Tea Drinking Countries in the World

Top 6 Ways to Improve Your Checkout Process and Close Sales

The 5 Most Profitable Online Businesses You Can Start Today

The 20 Most Profitable Hospitals in the US

The 5 Most Profitable Home Businesses to Start

The 7 Teams that Will Win the Stanley Cup in 2015

The Top 10 Most Expensive Digital Cameras to Snap Stunning Shots With

The 10 Highest Quality Fast Food Restaurants In America Today

The 8 Best Halloween Decorating Ideas to Spook Up Your House

10 Marvel Women that Should Get a Movie Right Now

The 20 Best Remixes of Popular Songs that Will Make You Forget the Originals

7 Most Expensive Cities in the World

5 Least Expensive Cities in the World

10 Celebrities Who Believe In Scientology

10 High Margin Food Products to Build a Business Around

The 10 Most Expensive Clothing Stores in the United States to Get Decked Out At

The 5 Biggest Kickstarter Scams That Swindled Backers’ Donations

The 10 Most Expensive Boarding Schools In the World

50 Crazy Facts About Japan You Won’t Believe

Top 10 Least Expensive Hybrid Cars to Save the Planet With

The 10 Biggest ‘Gate’ Controversies in History

The 10 States with the Highest Nursing Shortages Leaving Their Hospitals Depleted

The 10 Best Value Investment Blogs that Every Investor Must Read

The 6 Cheapest Boarding Schools in Europe 2015

The 5 Most Expensive Cars To Insure in the World

The 10 Most Common Genetically Modified Foods

10 Self-Made Billionaires Who Came From Nothing

The 10 Most Expensive Cities to Live in North America

The 13 Most Expensive Headphones in the World to Represent

The Top 20 Wealthiest Soccer Teams in 2014

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!