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Alcoa kicks off earnings season with strong start
Aluminium producer Alcoa has kicked off the earnings season by posting much stronger than expected profits.
Overall, Alcoa reported a profit of USD 24 million, compared with a prior-year loss of USD 143 million.
Saxo Bank’s Peter Garnry says that these positive results are due to cost reductions; it has for example slashed 16% of their high cost melting capacity, and although prices may have been declining, this has been offset by volumes.
In addition, manufacturers such as truck maker Navistar International and aircraft maker Boeing have been using more aluminum to cut down the weight of their products, and this has helped boost Alcoa's results.
Peter Garnry thinks it is a safe long term investment as "the global economy is shifting to a higher gear", which will spill into Alcoa. Aluminum is used by several key industries - automotive, aerospace and construction, which Peter says are booming right now.
01:46 minutes
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