By Patricia Kranz
July 9 (Reuters) – Alcoa Inc reported a quarterly net
loss, hurt by a slump in aluminum prices, even as the company
posted stronger-than-expected sales on Monday, slightly lifting
its shares.
It lost $2 million, or zero cents per share, compared with a
profit of $322 million, or 28 cents per share, in the same
quarter last year.
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Following are initial reactions of analysts and investors:
ALAN LANCZ, PRESIDENT, ALAN B. LANCZ & ASSOCIATES, TOLEDO,
OHIO
“If the market’s worried about Europe and the slowdown in
China, this is not going to change their attitude whatsoever.
The management’s doing a good job, cutting expenses and doing
the right things, but it’s not like you can make a macro call on
it. If anything, after you digest the numbers and listen to the
conference call, and guidance for next quarter, you could see a
change in the stock.”
BRIDGET FREAS, ANALYST WITH MORNINGSTAR INC, CHICAG0
“The bright news is what they said on the demand front. I
think a lot of people were looking for them to scale back on
that 7 percent increase (in global aluminum demand growth) and
they reaffirmed it.”
“The demand side looks OK, the pricing side looks horrible.
That’s the biggest driver for why they can’t turn a profit.”
“They’ve pretty much made all the headway they can on the
productivity gains, (and) they’ve improved the balance sheet.
You look at their downstream business, and they are performing
better than they every did before the recession.”
TIM GHRISKEY, CHIEF INVESTMENT OFFICER OF SOLARIS ASSET
MANAGEMENT, BEDFORD HILLS, NEW YORK
“The numbers look weak and they are, but the revenues are
actually above expectations. There is a big focus on revenue
this earnings season because people want to see that growth. The
market is greeting the numbers, as the stock is being traded
higher in extended trade, but I don’t it is a projection of what
the rest of the earnings season will look like.”
PAUL MASSOUD, ANALYST, STIFEL NICOLAUS & C0, WASHINGTON, DC
“Alcoa continues to rely on the mid- and downstream
operations to help them in a difficult upstream environment,
where pricing for the underlying commodity continues to be quite
weak.”
“They’re still showing that they can generate positive
profits, and I think that shows this is a company in transition
that’s moving toward less metal-price sensitive businesses.”
“On cost cuts, I think they’re making strides, but more work
does need to be done on that front.”
KUNI CHEN, ANALYST, CRT CAPITAL GROUP, STAMFORD, CONNECTICUT
“It was basically an in-line quarter, with not a lot of
surprises. The key headwind right now is still aluminum prices.”
JONATHAN PAVLIK, PORTFOLIO MANAGER AT STEWART CAPITAL
“It’s almost uneventful … aerospace and autos are
continuing to show strength, inventories are coming down, which
is good, but you still had another sequential decline in
aluminum prices for the quarter.”
“It’s not as bad as some people were thinking. Some people
were worried they would say China was really bad in addition to
Europe.”
“You can’t really say it was a great quarter, but it
definitely wasn’t as bad a some people thought it could have
been.”
(Reporting By Patricia Kranz; Additional reporting by Braden
Reddall, Matt Daily, Ernest Scheyder and Angela Moon; Editing by
Steve Orlofsky)
