UPDATE 3-Alcoa tops earnings outlook despite weak aluminum prices
By Allison Martell
Oct 8 (Reuters) - Aluminum producer Alcoa Inc reported better than expected earnings on Tuesday, as strength at the unit that sells auto parts and other complex items helped offset lower metal prices.
The engineered products business, which sells cast metal items such as wheels and plane fuselages, has proved more profitable recently than selling less processed metal at rock-bottom prices. Alcoa said productivity in that business rose from the previous year.
But operating results also improved in the hard-hit primary metals business, again thanks to productivity gains. After-tax operating income was $8 million in that segment, compared with a loss of $14 million a year earlier.
The company bumped up its global aluminum demand forecast for the heavy truck and trailer market to between 5 percent and 9 percent this year from 3 percent to 8 percent, citing improvements in Europe and China.
"As the trucking companies try to take weight off of big trucks and also trailers, and use engineered aluminum, that really seems to be paying off here," said Tim Ghriskey, chief investment officer at Solaris Asset Management.
Manufacturers such as truck maker Navistar International Corp and aircraft maker Boeing Co and have been using more aluminum to cut down the weight of their products, which can help cut fuel costs amid tightening environmental regulations.
The company's shares were up 3.2 percent at $8.20 in after market trading. Continued...