Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Alcoa kicks off earnings season with mixed report

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- Aluminum producer Alcoa Inc. posted a modest operating profit for its first quarter that met Wall Street expectations, as the Dow component became the first major company to report results for the period ended March 31.

Alcoa said it lost $194 million on continuing operations, or 19 cents per share, including charges for restructuring and other special items of $295 million, or 29 cents per share. Those charges included the cost of shuttering two smelters and a $112 million tax hit primarily from federal health care law changes.

Excluding the charges, Alcoa reported a profit of 10 cents per share, compared to a loss of 59 cents per share a year earlier. That's in line with the consensus forecast of analysts polled by Thomson Reuters, who typically strip out one-time charges.

But Alcoa missed revenue forecasts. Sales rose 18% during the quarter, to $4.89 billion. Analysts had predicted revenue would climb 26%, to $5.24 billion, from $4.15 billion a year earlier.

Alcoa said its slim operating profit was driven by an uptick in metal prices. Aluminum prices rose 8% during the quarter, while alumina prices surged 13%, the company said.

"Our performance continued to improve in the first quarter thanks to higher realized prices and strong operational results," Alcoa chief executive Klaus Kleinfeld said in a statement. "Our markets are gradually improving and both policy trends and consumer sentiment bode well for aluminum demand."

He added that a push to increase fuel efficiency and use sustainable products will boost sales of aluminum.

Klaus also said that while 2010 production levels are still below 2007 levels, they are rebounding compared to last year in industries that use aluminum, including automotive.

Alcoa estimates aluminum consumption in China to surge by 18% this year.

Share of Alcoa (AA, Fortune 500) slipped 0.4% in after-hours trading, after climbing almost 1.25% during regular hours. To top of page

Index Last Change % Change
Dow 22,349.59 -9.64 -0.04%
Nasdaq 6,426.92 4.23 0.07%
S&P 500 2,502.22 1.62 0.06%
Treasuries 2.26 -0.02 -0.70%
Data as of 1:58am ET
Company Price Change % Change
Bank of America Corp... 25.02 -0.14 -0.56%
Advanced Micro Devic... 13.30 -0.11 -0.82%
Apple Inc 151.89 -1.50 -0.98%
General Electric Co 24.87 0.12 0.48%
Ford Motor Co 11.84 0.12 1.02%
Data as of Sep 22
Sponsors

Sections

The shutdown, which raised protests from navigator groups, will occur from midnight to noon on on all but one Sunday. More

Facebook's board withdrew a proposal that was the subject of a shareholder lawsuit. As a result, the CEO will no longer head to court on Tuesday. More

When you're making big career decisions, you turn to your mentors and your trusted peers. But how do you find these mentors and trusted peers in the first place? More