Alcoa swings to a loss, misses forecast

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NEW YORK (CNNMoney.com) -- Alcoa Inc. said Tuesday it swung to a wider-than-expected first-quarter loss, as the aluminum producer blamed the continuing economic downturn and a "historic decline" in metal prices.

The Pittsburgh-based company posted a loss of $497 million, or 61 cents per share - its second quarterly loss in a row. Last year Alcoa made a profit of $303 million, or 37 cents per share a year ago.

Excluding a loss from discontinued operations, Alcoa lost 59 cents per share, which was more than the 56 cents per share expected by analysts surveyed by Thomson Reuters, who usually excludes special items.

Revenue fell 41% to $4.15 billion from $7 billion in the year-earlier quarter. Analysts had forecast sales of $4.08 billion.

The company said the sharp drop in revenue was caused by the recessionary effects on its end markets: the automotive, transportation, construction and aerospace industries. Meanwhile, it said metal prices are now about 60% lower than last summer.

The rapid decline in aluminum prices sent Alcoa into the red last quarter, but the company has been looking for ways to save money.

"We've been moving quickly to cut costs," said Alcoa chief executive Klaus Kleinfeld in a conference call with analysts.

Last month, Alcoa slashed its dividend by 82% to 3 cents a share as part of a plan to save $2.4 billion by 2010. Other measures include cutting procurement and production costs.

Kleinfeld added that Alcoa was starting to see signs that the economy was starting to touch bottom, and that its money-saving efforts would help it gain market share.

"They did an excellent job, it appears, on cost-cutting," but it may not be enough to offset the falling price of aluminum, said Charles Bradford, an analyst with Bradford Research.

Alcoa is the first Dow component to release its first-quarter report, and its early numbers can help investors gauge how the economic crisis will impact businesses.

Alcoa (AA, Fortune 500) shares fell 3.6% in after-hours trading.