Alcoa’s profits tumbled in the fourth quarter as aluminum prices swooned. However, the aluminum company still beat expectations on the bottom line, sending its shares higher.
The company swung to a loss of $500m, from a profit of $159m in the same three-month period in 2014. The results included a $565m hit mainly due to plant closures and income tax charges.
Sales slipped 17.8 per cent to $5.2bn, missing expectations of $5.3bn.
Adjusted earnings per share clocked in at 4 cents a share, topping estimates by two cents.
Alcoa’s profits have been squeezed by aluminum prices, which dropped about 20 per cent during the fourth quarter. The company’s results are typically seen as the start of earnings season, as Alcoa is regarded as a bellwether given how widely aluminum is used.
Headquartered in New York, Alcoa revealed plans in September to split into two companies: an upstream business that includes its smelting operations, and another which includes its faster growing segments like rolled aluminum products.
The bounce in the shares came after a testing time for the stock, which has fallen in half over the past 12 months amid a broader sell-off in the commodities sector. The shares climbed 2.5 per cent in extended trading.