NEW YORK (CNN/Money) - Alcoa Inc., the No. 1 aluminum producer, said Friday that operating profits in the latest quarter edged higher as cost cutting offset the rise in energy prices that came ahead of war with Iraq.

But net profit fell 30 percent at Alcoa, which cited softness in the aerospace, industrial gas turbine and commercial building markets as a weak manufacturing sector weighed on the company.

Still, shares of the company, which have lost nearly half their value over the last 52 weeks, jumped nearly 5 percent in after-hours trading.

Alcoa's first-quarter operating profit, which excludes a charge related to an accounting change, rose to $195 million, or 23 cents a share. That's up 6 percent from the $184 million, or 22 cents a share, earned on a comparable basis a year ago.

"Their results were a positive surprise," Kirk Schmitt, an analyst at Victory Capital Management, which has about $62 billion under management, told Reuters. "You don't see many metal companies earning money in this weak environment because of their high cost structures."

Revenue in the quarter ended last month rose 4 percent to $5.11 billion, falling short of Wall Street's consensus forecast.

Analysts expected Alcoa to earn 19 cents a share on $5.2 billion in revenue, according to First Call, which tracks forecasts.

Alcoa, the first major company to report March quarter results, said net income fell to $151 million, or 17 cents a share, from $218 million, or 26 cents a share, in the year-ago quarter.

The economy softened last month, when employers cut 108,000 jobs from their payrolls. The Institute for Supply Management said its March index of manufacturing activity fell to the lowest level since November 2001 as the build-up to war in Iraq slowed demand for chemicals, electronics and industrial equipment.

Alain Belda, Chairman and CEO of Alcoa called the business environment challenging.

"We are focused on managing what is under our control," Belda said in a statement Friday.

Alcoa said it saved $52 million in the quarter, when energy costs rose $110 million from the year-ago quarter. Oil prices rose to nearly $40 a barrel last month before falling.

"Despite significantly higher energy prices which offset more favorable metal prices, we achieved solid cost savings results from the restructuring undertaken over the last two years...," Belda said.

Some of that cost saving came from a multimillion-dollar restructuring announced earlier this year that led to 8,000 job cuts at Alcoa.

The first-quarter operating results exclude a $47 million charge for an accounting change, while the year-ago quarterly figures exclude a $34 million gain. The company said its 4 percent revenue gain in the March quarter was helped by the acquisition of Fairchild Fasteners, which became part of Alcoa last December.

Alcoa, which used to be run by former Treasury Secretary Paul O'Neil, typically reports results before the market opens.

But William F. Oplinger, of Alcoa's investor relations department, said analysts have asked for more time to study the results before the start of trade.

Monday's market open could bring gains. Shares of Pittsburgh-based Alcoa (AA: Research, Estimates) rose 96 cents, or 4.8 percent, to $21 in after-hours trading Friday. But the stock is still down 46 percent from its 52-week high above $39.

No. 82 in the Fortune 500, Alcoa had $20.6 billion in 2002 revenue. The maker of Reynolds Wrap foil sells aluminum to the aerospace, automotive, packaging and building industries.

Friday's results were a big change from the last time Alcoa reported. News in January that Alcoa lost $223 million in its fourth quarter and posted operating income that missed analysts forecasts sent shares tumbling.