Alcoa Quarterly Results Top Estimates as Aluminum Prices Surge

(Bloomberg) -- Alcoa Corp. reported first-quarter earnings that beat analysts’ expectations, with aluminum prices surging amid optimism that reopening economies will spur demand for everything from automobiles to airplanes to toasters.

The biggest U.S. aluminum producer reported earnings before interest, taxes, depreciation, and amortization of $521 million, topping the $450.8 million average of six analysts’ estimates compiled by Bloomberg and the highest since 2018. Sales rose to $2.87 billion, the company said in a statement Thursday, compared with the $2.62 billion analysts had forecast.

Shares of Alcoa have climbed six-fold from a pandemic low last year, with aluminum demand rising just as China’s push to cut carbon emissions spurs expectations that the Asian nation will curb aluminum-supply expansions. China is the world’s largest producer of the metal. Alcoa Chief Executive Officer Roy Harvey said last month that China is taking meaningful steps to rein in production, calling it a “game-changer” for the industry after years of gluts.

The Pittsburgh-based company expects a strong 2021 based on continued economic recovery and increased demand for aluminum in all end markets, according to the statement.

Benchmark aluminum prices surged 25% from the end of September through March, marking the biggest gain over that period since 2006.

A resurgence in virus cases and vaccine shortages in some countries is hurting economic-growth prospects in regions including Asia. Federal Reserve Chair Jerome Powell said this week that while the U.S. economy appears poised for stronger growth, Covid-19 remains a threat.

The earnings statement was released after the close of regular trading in New York, where Alcoa fell 1.7% to 32.84. The shares rose following the report.

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