Alcoa profit falls, lowers outlook for aerospace industry sales

Thomson ReutersFile photo shows an Alcoa aluminum plant in Alcoa, Tennessee

CHICAGO (Reuters) – Metals company Alcoa Inc on Monday reported a lower quarterly profit, with results hurt by low commodity prices, the strong U.S. dollar and plant closures or divestments, and it also lowered its 2016 outlook for global sales in the aerospace industry.

The company’s shares fell nearly 4 percent in after-market trading.

Alcoa will split in two in the second half of this year.

The company’s traditional smelting business will retain the Alcoa name, while a new firm named Arconic will retain the added-value aerospace and automotive business involving strong, light alloys that the company has worked hard to build in recent years.

Alcoa said it now expects global sales in the aerospace industry to grow in a range of 6 to 8 percent this year. That is down from its last forecast in the fourth quarter of 2015 of growth between 8 and 9 percent.

The company said it expects global automotive production to grow between 1 and 4 percent this year.

The New York-based company posted a first-quarter net profit of $16 million or 0 cents per share, down from $195 million or 14 cents per share a year earlier.

Analysts on average had expected earnings per share for the quarter of 2 cents.

Excluding one-time items, the company said earnings per share totaled 7 cents.

Revenue for the quarter fell 15 percent to $4.95 billion from $5.82 billion a year earlier. Analysts had expected revenue for the quarter of $5.14 billion.

Alcoa said the drop in revenue was primarily due to slumping alumina and aluminum prices.

In after-market trading, Alcoa shares were down 3.9 percent at $9.36.

(Reporting by Nick Carey in Chicago; Editing by Tom Brown and Matthew Lewis)

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