The company reaffirmed its 2011 global aluminum demand growth projection of 12%. For the gains, it cited higher realized prices for alumina and aluminum, growing demand for aluminum products in major end markets, and productivity gains. For the rest of 2011, Alcoa sees growth factors being a growing population, more urbanization, and aluminum’s advantages as a light, strong and recyclable material. That did not exactly exude “massive growth demand for the new world.” Alcoa further noted being on track to meet its 2011 financial targets with a 130 basis point improvement in its debt-to-capital ratio rising to 33.6%.
End Markets
The company’s end markets showed continued revenue growth in the first quarter, with aerospace segment revenue up 20 percent, packaging up 45 percent, building and construction up 26 percent and commercial transportation segment revenue up 37 percent year-over year. Third-party pricing increased for both alumina (21 percent) and aluminum (15 percent).
P/E Ratio
Alcoa, Inc. engages in the production and management of aluminum, fabricated aluminum, and alumina. The company operates in four segments: Alumina, Primary Metals, Flat-Rolled Products, and Engineered Products and Solutions. The company has a P/E ratio of 72.5, below the average metals & mining industry P/E ratio of 75.5 and above the S&P 500 P/E ratio of 16.8.
Share Price
Alcoa’s share-price decline was amplified by macro-economic factors, analysts and traders said, with stocks falling sharply across the metals and mining complex. Renewed fears in Japan after the government raised the radiation-threat ranking to the same level as Chernobyl, weak U.S. import data and a bearish call on commodities (especially oil and copper) from
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