NEW YORK (CNNMoney) -- Aluminum producer Alcoa Inc., which is the first Dow component to report results for the final quarter of 2010, posted better than expected earnings.
Shortly after markets closed, Alcoa reported earnings per share of 24 cents on income of $258 million, its highest quarterly earnings in more than two years.
Excluding gains for one-time items, such as restructuring and income tax benefits, earnings per share were 21 cents, which still topped analysts' expectations.
That's up significantly from the third quarter, when Alcoa earned six cents per share on income of $61 million.
"The better earnings per share compared to the prior quarter was basically due to the price of aluminum, which has come up quite a bit in recent months," said Bridget Freas, an analyst for Morningstar Inc.
"We exceeded all of our targets and continued to build momentum," said Klaus Kleinfeld, Alcoa chairman and CEO. "We delivered all-time record cash from operations, record fourth-quarter free cash flow, improved earnings, grew revenue and paid down debt."
Alcoa's fourth-quarter revenue was $5.7 billion, up 7% compared to the third quarter, an increase the company attributed to higher alumina and aluminum prices.
The company expects the momentum to continue, as it projects global demand for aluminum to double by 2020.
"In 2011, we see aluminum growing another 12% on top of last year's 13% improvement. We are well positioned to outpace the recovery in the markets we serve and grow shareholder value," Kleinfeld said.