Despite Profit Drop, Alcoa Still a 'Confident Company'

Pittsburgh-based aluminum producer is the first company in the Dow Jones Industrial Average to report its third-quarter earnings.

Alcoa on Tuesday said its third-quarter net earnings were triple a year earlier, but slid from the previous quarter as metal prices fell and the European economy stumbled.

Opening the corporate-earnings reporting season, Alcoa said its net income for the three months to Sept. 30 was $172 million, on sales of $6.4 billion, compared with earnings of just $61 million on $5.3 billion in sales for the year-earlier quarter.

But lower aluminum prices meant the quarter's net was nearly half of the previous quarter's $322 million, while total sales were only down 2.5%, the company said.

Earnings per share for the third quarter was 15 cents, compared with 6 cents a year earlier.

Alcoa's earnings-per-share results widely missed market expectations of 22 cents, although sales topped forecasts of $6.42 billion.

"Aluminum prices fell in the third quarter, but most markets continued to grow," Alcoa Chairman and CEO Klaus Kleinfeld said in a statement.

"With the exception of Europe, we saw growth in our end markets, though at a slower rate than in the first half, as confidence in the global recovery faded."

Kleinfeld predicted a growth rate of 12% for the firm this year, and stuck by its forecast for a doubling of global aluminum demand by 2020.

"Alcoa is a confident company in a nervous world. We are well prepared for whatever lies ahead, with more cash on hand, lower debt and continued focus on profitable growth."

The first Dow Jones Industrial Average component to report third-quarter results, Alcoa released its earnings after the stock markets closed.

Copyright Agence France-Presse, 2011

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