Monday afternoon marked the unofficial start of first-quarter earnings season, as industrial bellwort Alcoa (click ticker for report: ) reported its results. For the first quarter, revenue fell nearly 3% year-over-year and 1% sequentially to $5.8 billion, just shy of consensus estimates. Earnings per share, net of one-time special items, increased 22% year-over-year to $0.11, easily exceeding consensus expectations.
Although Alcoa isn’t nearly as important to the US economy as it once was, the firm still provides a general overview of several important sectors. Aluminum prices were flat during the quarter, but the firm anticipates global growth of 7% with supply and demand remaining balanced.
Image Source: Alcoa Analyst Presentation Q1 2013
Alcoa sees a positive outlook for several sectors in 2013, as it anticipates global aerospace growth of 9%-10%, automotive growth of 1%-4%, commercial transportation growth of 2%-7%, packaging growth of 2%-3%, building and construction growth of 4%-5%, and industrial gas turbine growth of 3%-5%. We couldn’t agree more, which is why we continue to include shares of Precision Castparts (click ticker for report: ), Astronics (click ticker for report: ), and Ford (click ticker for report: ) in the portfolio of our Best Ideas Newsletter. Strong growth in aerospace and automotive could have powerful multiplier effects, and Alcoa provided a convincing chart showing the future growth trajectory of the aerospace market (shown below). The company also sees positive growth in the US non-residential construction market, though it believes Europe remains weak in 2013.
Image Source: Alcoa Analyst Presentation Q1 2013