ALCOA and AE Doing Better

Two Pittsburgh based companies have helped start the earnings season with a bang. Alcoa beat expectations for both earnings and revenue for the third-quarter. Forecasters had predicted a nine-cent per share loss for the aluminum giant but yesterday’s report came with a four-cents per share gain. That comes on a $4.62 billion in revenues in the third-quarter. Today, Pittsburgh based American Eagle Outfitters upped its third-quarter earnings guidance from 22 to 25 cents a share to an expected 24 cents to 26 cents per share. The company noted better than expected September sales even though sales at stores open more than a year were flat year-over-year. Overall sales were up 7%. ALCOA says its better than expected numbers came despite a 33% percent drop in revenue compared to last year. Some of that was offset through a workforce reduction plan aimed at slashing 22,200 jobs and a “company wide reduced spending mindset.” Revenue was up 9% in the third-quarter compared to the second and the price ALCOA charges for its products is on the rise as well. Company CEO Klaus Kleinfeld says among the bright spots in the 4th quarter should be sales to the auto industry. He says despite the end of the cash for clunkers program, demand should be good. He notes that vehicle inventories are about half what they normally are.