NEW YORK (CNN/Money) - Alcoa Inc. posted reduced first-quarter income Friday and warned that its immediate operating environment remains challenging.

The world's largest aluminum producer posted net income of $184 million, or 22 cents a diluted share, excluding a one-time gain of $34 million, or 4 cents a share, related to a change in accounting rules. Excluding the gain Alcoa was in line with the consensus forecast of analysts surveyed by earnings tracker First Call. The company earned $404 million, or 46 cents a share, in the year-earlier period.

The operating results were helped by the change in accounting rules by which the company no longer must exclude the value of goodwill. That added about $44 million, or 5 cents a share, to results for the quarter.

Revenue fell to $4.98 billion from $6.18 billion a year earlier due to declines in both the price and demand for aluminum. Shipments fell just less than 5 percent while the averaged realized price fell 14 percent.

Alcoa did not give specific future earnings guidance but said it sees a continued challenging environment limiting the effects of cost-cutting efforts.

The results were an improvement from fourth-quarter earnings of 11 cents a share excluding a one-time charge, and the company said it remains on track to save $1 billion in annual costs by 2003, with the first-quarter savings coming in at annualized rate of $436 million.

"As demand for aluminum strengthens, we will capture the efficiencies generated by last year's strategic restructuring of our operations," CEO Alain Belda said.

Shares of Alcoa (AA: Research, Estimates), the first component of the Dow Jones industrial average to report results, gained 97 cents, or 2.6 percent, to $37.85 at midday on Friday. The stock closed the minus column Thursday after Prudential analyst John Tumazos forecast lower long-term earnings due to continued weakness in commodity aluminum prices.