When we Motley Fool writers dare to suggest that today's prices for commodity metals like nickel, zinc, and aluminum will ultimately fall, we usually receive a reliable deluge of "How dare you?!" emails. People will point to China and India, or underinvestment in production assets, or still other points of reference, but few seem willing to accept that cycles have tops and bottoms.
Well, ponder this -- the CEO of Alcan
By the same token, that doesn't mean current results aren't pretty good. Alcan posted 17% revenue growth, and growth margins improved by more than three percentage points. While there are a few different ways to look at earnings growth (continuing operations, operating earnings, and so on), all of them show pronounced growth from last year.
That growth is still primarily fueled by strong pricing and internal operating improvements. Total volume increased just 2.4% this quarter (with ingot volume a little higher), but ingot price realizations were up by one-third.
For more metal-minded Foolishness:
Feeling foiled by an ever-shifting market? Motley Fool Hidden Gems can help you find the boring but brilliant businesses that Wall Street overlooks. Join lead analysts Tom Gardner and Bill Mann today with a free 30-day trial.
Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).