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Alcoa 3Q profit slips
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October 4, 2001: 1:06 p.m. ET
Aluminum producer posts earnings in line with Wall St. estimates
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NEW YORK (CNNfn) - Alcoa Inc. posted an 8 percent drop in third-quarter profit Thursday, matching Wall Street forecasts, as the world's biggest aluminum producer wrestled with lower metal prices and a drop in shipments.
The company, the first component of the Dow Jones industrial average to report September-quarter results, earned $339 million, or 39 cents a share, matching forecasts of analysts surveyed by earnings tracker First Call. That was off 8 percent from $368 million, 42 cents a share, a year earlier.
"Like usual, Alcoa reported decent results in a tough environment," said Salomon Smith Barney analyst Michelle Applebaum. "In a market like this Alcoa typically shines because of its level of cost controls."
Sales fell 12.5 percent to $5.5 billion from $6.3 billion, the Pittsburgh-based company said in a statement, but edged past analysts' forecasts of $5.4 billion.
The company was hit by primary aluminum prices about 11 percent lower than the same quarter a year ago. Its primary aluminum shipments fell 11 percent due to capacity cuts, including 710,000 metric tons of capacity not operated due to energy shortages in the Pacific Northwest and Brazil.
Alcoa's (AA: up $0.21 to $32.30, Research, Estimates) Chief Executive Alain Belda said market weakness would continue in the fourth quarter. "Alcoa's continuing success in reducing costs and managing what is in our control helped to lessen the combined negative impact of lower prices, weak end markets in the U.S. and Europe, and production cutbacks in refining and smelting," Belda said.
With mounting job layoffs and production cuts in the auto and airline industries, two major buyers of the metal, industry experts said they expect more production cuts before things get better.
Aluminum production is considered to be one of the best indicators of the health of the economy, as the metal is used in everything from soft drink cans to airplanes.
The company was formerly run by Treasury Secretary Paul O'Neill.
-- from staff and wire reports 
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Alcoa
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