FLASH: $AA BEATS EXPECTATIONS

Reports Q2 (Jun) earnings of $0.06 per share, excluding non-recurring items, in-line with the Capital IQ Consensus Estimate consensus of $0.06; revenues fell 9.4% year/year to $5.96 bln vs the $5.82 bln consensus, primarily due to an 18 and 17% year-on-year decline in the realized metal price and realized alumina price, respectively. Alcoa recorded revenue growth in the second quarter across global end markets, including packaging (5%), aerospace (4%), and commercial transportation (3%), compared to 1Q12. Alcoa continues to project a global aluminum supply deficit in 2012 and reaffirmed its forecast that global aluminum demand would grow 7% in 2012, on top of the 10% growth seen in 2011. Strength in the midstream and downstream businesses continued to mitigate volatility in the upstream businesses. Engineered Products and Solutions once again turned in record results, with second quarter adjusted EBITDA margin at 19.4%, the highest to date. Despite continued European weakness, Global Rolled Products achieved record first half adjusted EBITDA per metric ton of $409, 74% higher than the 10-year average, and record first half ATOI of $191 million… Alcoa proposed to settle the Alba civil suit by offering Alba a cash payment of $45 million. Alcoa has also offered Alba a long-term alumina supply contract. Based on the cash offer, Alcoa recorded a $45 million charge. Alcoa currently estimates an additional possible charge of up to $75 million to settle the suit. In addition, Alcoa has been in dialogue with the Department of Justice and the Securities and Exchange Commission regarding their investigations. If a settlement of the government’s investigations can be reached, it is probable that the amount would be material in a particular period to Alcoa’s results of operations.