Alcoa's third-quarter profit rises
( Reuters ) - Aluminum producer Alcoa Inc on Tuesday posted a 3 percent rise in third-quarter earnings, as a gain on the sale of its stake in a Chinese aluminum company offset weaker aluminum prices.
Alcoa also raised its share buyback program -- from 10 percent to 25 percent of outstanding shares, or about 217 million shares. At the current share price that is worth more than $6.7 billion.
Bruce Zaro, Chief Technical Advisor at Delta Global Advisors called the share repurchase "somewhat surprising."
"The good news is that the cash flow has been so strong that they are able to do this," he said.
Alcoa's net profit rose to $555 million, or 63 cents per share, compared with $537 million, or 61 cents per share, in the year-ago period.
Earnings from continuing operations were 64 cents per share, up 2 cents from a year earlier, the Pittsburgh-based company said.
Wall Street analysts lowered their profit expectations for Alcoa in recent weeks as the price of aluminum has slipped. It was not immediately clear what the consensus estimate of 66 cents per share compares with, according to Reuters Estimates.
The falling metals prices, along with the exclusion of the company's soft alloy extrusion business that now forms a joint venture with Sapa in June, helped drag revenue in the period 2.6 percent lower to $7.4 billion.
"Macroeconomic drivers such as the weakening U.S. dollar, higher petroleum costs and market softness in North America impacted the quarter," said Alcoa Chairman and CEO Alain Belda.