Results from the first quarter of 2013 are about to be unleashed on the market following the first major release of the season. Early this morning Alcoa displayed 15% growth over the same quarter in 2012 thanks in large part to the aerospace and automotive industries. After taking significant measures in 2012 to cut its cost structure, there are high hopes that margins will expand throughout the year.
With companies like Ford posting the highest March sales figures in six years, demand for aluminum could continue to creep higher. Along with this rise in demand, pricing pressures should recede a bit now that China has pulled back slightly on production, and considering that end users' inventories are starting to shrink.
Materials industries are traditionally known for their high barriers to entry, and the aluminum industry is no exception. Controlling about 15% of global production in this highly consolidated industry, Alcoa is in prime position to take advantage of growth that some expect will lead to total industry revenue approaching $160 billion by 2017. Based on this prospect and several other company-specific factors, Alcoa is certainly worth a closer look. For a Foolish investment perspective on this global giant simply click here now to get started.
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