Thu, Oct 13, 2011 - Page 10 News List

Alcoa profits drop amid falling metal prices, EU’s woes

AFP, NEW YORK

Aluminum giant Alcoa on Tuesday said its third-quarter net earnings almost tripled from 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 US$172 million, on sales of US$6.4 billion, compared with earnings of just US$61 million on US$5.3 billion in sales for the year-earlier quarter.

However, lower aluminum prices meant the quarter’s net was nearly half of the previous quarter’s US$322 million, while total sales were only down 2.5 percent, the company said.

Earnings per share for the third quarter was US$0.15, compared with US$0.06 a year earlier.

Alcoa’s results widely missed market expectations of earnings per share of US$0.22, although sales topped forecasts of US$6.42 billion.

“Aluminum prices fell in the third quarter, but most markets continued to grow,” Alcoa chairman and chief executive 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 percent for the firm this year, as the firm 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,” he said.

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

Shares plunged 5.5 percent to US$9.72 in post-market trading.

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