China still growing says Alcoa
Despite concerns that China may be slowing—or worse—aluminum giant Alcoa still sees robust demand in China for its products and pegs growth at 11% this year.
The world's third largest aluminum producer reported its 2Q today, reporting earnings per share of $0.00 based on a $2 million loss from continuing operations and income from continuing operations of $61 million, or six cents per share, after excluding special items. Despite the 81% earnings drop, the company still beat analysts' expectations.
The company is one of the first large companies to report quarterly results and sets the stage for rest of the earning's season.
During its conference call, Alcoa said the rest of Asia, excluding China, is set to grow 6%, down from 10% a year ago. Last year Alcoa had growth in China set at 15%.
Overall world growth was maintained at 7% compared to 10% a year ago.
China showed growth across most of Alcoa's end markets, like automotive, beverage cans and commercial buildings. The only anticipated decline was heavy trucks and trailers.
The North American demand for aluminum and cars was particularly strong, pegged at 10% to 14% sales growth due to car manufacturers needing lighter materials for cars. The body of the high-end Tesla Model S is stamped from aluminum.
A year ago the company reported net income of net income of $322 million, or $0.28 per share in the same quarter.
"Special items in second quarter 2012 included reserves for environmental remediation, uninsured losses related to the Massena fire, a net discrete tax charge, and restructuring and other charges," said the company in a news release.
"In addition, during the quarter, Alcoa proposed to settle the Alba civil suit by offering Alba a cash payment of $45 million. Alcoa has also offered Alba a long-term alumina supply contract."