Alcoa Inc. said its first-quarter earnings fell 92%, hurt by weak aluminum prices, and said it could cut as many as 2,000 jobs. Oil prices surged as Russia and Saudi Arabia agreed (again) to an output freeze.
The aluminum smelter’s lukewarm results Monday underscore the company’s motive in spinning off its more profitable aerospace and automotive-focused business in the second half of this year.
The company is in the process of spinning off its faster-growing business units into a separate company, to be named Arconic. Alcoa reiterated that the spinoff remains on track for completion in the second half of this year and noted that profit grew at those businesses in the first quarter.
Alcoa traditionally kicks off earnings season by reporting its quarterly numbers first among major companies.
Oil Rises on Freeze Talks… Again
Brent crude oil reached a 2016 high above $44 a barrel today on a report Saudi Arabia and Russia have agreed to follow through with a production freeze regardless of whether Iran participates in the plan to tackle a supply glut. This is not the first time the two oil powers agreed to the freeze.
Crude prices rose earlier in the session on hopes for the upcoming meeting, and by a weak U.S. dollar and further signs of strong demand in China.