Alcoa Inc. officially split Tuesday, as the aluminum giant and one-time member of the Dow Jones Industrial Average separated its beleaguered raw aluminum operation from the businesses that supply the aerospace and automotive markets.

In midday trading in New York, shares of Alcoa?the spinoff that contains the beleaguered raw aluminum operation?rose 7.7% to $23.10, while shares of Arconic Inc.?the renamed parent company that houses the company's businesses supplying the aerospace and automotive markets?fell 7.7% to $19.87.

The split culminates the vision of Klaus Kleinfeld, who has led the company since 2008 and will be chief executive of Arconic. Mr. Kleinfeld has said the split would create "two leading-edge companies, each with distinct and compelling opportunities."

When the split was announced in September 2015, it aimed to capitalize on what had been expected to be the higher-growth business of making manufactured goods, often with nonaluminum alloys, for the aerospace and automotive industries. That business, now part of Arconic, is viewed as having higher growth potential because of demand from aircraft makers for fasteners, screws and other parts made out of high-tech alloys.

Meanwhile, Alcoa's raw aluminum enterprise, which it pioneered in 19th century Pittsburgh, had been rocked by an aluminum glut generated largely by China.

More than a year later, Arconic's businesses are suffering as demand from the aerospace and automotive sectors again proves to be cyclical. At the units forming Arconic, sales in the latest quarter fell 1%from a year earlier to $3.4 billion, reflecting adjustments to delivery schedules in the aerospace industry, softness in North America commercial transportation and pricing pressures.

Based on trading Tuesday, Arconic has a market cap of about $10 billion.

As for Alcoa's traditional metals operations?which include smelting, mining and refining?the company reported revenue of $2.3 billion in the latest quarter, which it said was roughly the same as the year-earlier quarter, reflecting continued low alumina prices and the impact of curtailed and closed operations.

Roy Harvey, who was in charge of primary production, is the CEO of Alcoa, which now has a market cap of about $3.36 billion.

Alcoa has been an iconic name in the stock market. It was a Dow component for 54 years, and its early quarterly financial report is still seen as the unofficial start to earnings season.

Research suggests that spinoffs tend to do better than their larger corporate parents. Since 1999, spinoffs have outperformed their parents by 9 percentage points in the first two years following the breakup, according to research published by Goldman Sachs. Spinoffs also have outperformed the S&P 500 by 6 percentage points over the same time frame.

Reasons cited for the outperformance of spinoffs include the fact that management is often more incentivized to perform well and has additional flexibility in how they operate their businesses. In addition, the leaner businesses often become attractive acquisition targets, meaning takeover premiums get built into these share prices.

John W. Miller and Steven Russolillo contributed to this article.

Write to George Stahl at george.stahl@wsj.com

(END) Dow Jones Newswires

November 01, 2016 12:15 ET (16:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.