One of the world’s leading aluminum producers Alcoa (AA) is forming a joint venture with Russia’s VSMPO-AVISMA Corporation,
the biggest player of the titanium ingots and forged products market.
The two companies will fulfill the ever-increasing demand of aluminum
and high-end titanium from aircraft manufacturers.
Last month, Alcoa
reported its quarterly results for the first time after its exit from
the Dow Jones Industrial Average. The company has been suffering due to
the global economic slowdown and weakness in metal prices but the
business has been working on improving its margins. The aluminum giant
is also expecting some improvements from China. Alcoa has struggled due
to the persistent weakness in the business environment, it has large
levels of debt and its stock has performed poorly. But after the recent
earnings beat and a relatively better performance at the NYSE in
October, should you put your money in this company?
Earnings Beat
Last month, Alcoa reported its
results for the third quarter in which it managed to beat both top and
bottom line estimates. The company’s revenues dropped 1.17% from last
year to $5.77 billion, which was above market’s
expectations
of $5.63 billion. Adjusted earnings came in at $120 million, or $0.11
per share, showing a significant increase from $32 million or $0.03 per
share in the third quarter of 2012, easily beating the profit estimates
of $0.05 per share.
The better than expected performance, despite the weakness in metal prices, can be
attributed to
.... read full article at GuruFocus
