- THE MAGAZINE
Earnings for the second quarter improved $331 million sequentially, as stronger volumes, productivity improvements, favorable currency and lower energy costs more than offset slightly lower average realized metal prices, which declined $22 per metric ton to an average of $2309/ton in the quarter.
Revenues for the quarter were $5.2 billion, a 6% increase from the first quarter of 2010, driven by a 4% increase in aluminum shipments and a 1% increase in third-party prices for alumina, partially offset by a 1% decrease in realized prices for aluminum. Many markets saw strong revenue growth from the previous quarter, with packaging (+17%), commercial transportation (+10%), building and construction (+9%), distribution (+5%), industrial gas turbines (+5%), and aerospace (+5%) realizing gains. Revenues increased 22% from $4.2 billion in the second quarter of 2009.
“We improved profits and revenues and maintained our solid cash position,” said Klaus Kleinfeld, chairman and CEO. “The top and bottom line growth was driven by higher volumes from stronger end markets and continued gains from our productivity programs. Based on this improved end-market demand, we are raising our projection for aluminum consumption from 10% to 12% this year.
The company’s Alumina segment achieved after-tax operating income (ATOI) of $94 million in the second quarter, an increase of $22 million compared with first quarter ATOI of $72 million. Higher production and a 1% increase in realized price, along with favorable currency and productivity benefits, were partially offset by commissioning issues at the Sao Luis refinery. Alumina production in the second quarter increased 24,000 metric tons (kmt) to 3890 kmt, as increases across the global system more than offset declines at Sao Luis.
For more information, visit www.alcoa.com.