Alcoa kicks off earnings season with mixed results

Alcoa delivered quarterly earnings that topped analysts' expectations Monday, but revenue fell just short of what was expected, as some high-growth segments helped to slightly negate headwinds in its legacy business.

The metals and mining company posted fourth-quarter earnings of 4 cents per share on revenue of $5.25 billion. Alcoa's sales fell 18 percent from the previous year, driven by lower aluminum and alumina prices but partially offset by progress in its aerospace business.

Analysts expected Alcoa to post earnings of 2 cents per share on $5.29 billion in revenue, according to a consensus estimate from Thomson Reuters.

Its shares initially rose about 2 percent in extended-hours trading Monday, before reversing to a modest drop. (Click here for the latest quote).

A worker walks among rolls of semi-finished aluminum at an Alcoa aluminum factory.
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A worker walks among rolls of semi-finished aluminum at an Alcoa aluminum factory.

Alcoa reiterated its plans to separate into two publicly traded companies, one housing its legacy aluminum and smelting operations and the other its higher-growth materials segment. The decision was announced last year amid a divergence of the businesses.

The company's metals unit has taken a hit from a sustained commodities crunch and its shares have fallen nearly 50 percent in the last year.

After the results, Alcoa CEO Klaus Kleinfeld highlighted progress in both businesses, particularly traction in the aerospace segment and efforts to curb the effects of commodities prices. The company reported that it had $9 billion in aerospace contracts for 2015, double its total in 2014.

"Look, I think if you look at the quarter it's been really a solid quarter. We have substantially grown our aerospace business," he said Monday on CNBC's "Closing Bell."

Alcoa reported results for the units that will become independent companies. It posted $3.3 billion in revenue and after-tax operating income of $215 million for its value-add business, which houses its global rolled products and engineered products units.

The company reported $2.4 billion in sales for its upstream business, with after-tax operating income of $58 million. Alcoa also projected "robust global aluminum demand growth" of 6 percent for 2016.

Kleinfeld stressed that Alcoa has "changed the architecture" of its mining business amid a "difficult environment."

"We basically have done everything in our own control, reshaped the business and look where we are, we're still standing and still making a profit," he said.

Kleinfeld contended that concerns of a slowdown and decreased commodities demand in China would not drag on Alcoa's business. He stressed that the "financial markets always swing stronger than the industry."

"We are not dependent on China. China has opportunities rather than threats for us," Kleinfeld said.

Alcoa's full-year revenue came in at $22.5 billion, 6 percent lower than for 2014.