But results at No. 1 aluminum producer top forecasts on Wall Street; stock rises after-hours.
July 8, 2003: 5:43 PM EDT
NEW YORK (Reuters) - Alcoa Inc. said Tuesday that second-quarter net profit fell because of higher energy costs and weak demand from the aerospace and turbine industries.
The world's No. 1 aluminum producer, which announced a massive restructuring earlier this year, posted net income of $216 million, or 26 cents a share, down from $232 million, or 27 cents a share, a year earlier.
The first Dow component to report earnings for the second quarter, Alcoa recorded a profit, excluding items, of 27 cents a share, or 3 cents above the average analyst forecast of 24 cents a share.
The company, which makes metal used in everything from beverage and food cans to auto parts, is restructuring because of soft demand from the aerospace and gas turbine industries.
Falling ticket prices and fewer airline passengers have led to a decline in new aircraft orders, while the poor credit quality of many energy companies has forced the cancellation or delay of new power plants.
These conditions helped propel Aloca's chief rival Alcan Inc. to offer $3.9 billion for French aluminum company Pechiney on Monday.
Alcoa said on Tuesday it plans to focus on internal productivity improvements.
"While we have not seen signs of market improvements, we are well positioned to reap the benefits of any upturn," Alcoa Chief Executive Alain Belda said in a statement.
Revenue rose to $5.50 billion from $5.20 billion, helped by strong aluminum ingot shipments and seasonal improvements in the packaging and residential construction markets.
Given concerns about the timing of an industrial recovery and the volatility of aluminum prices, Alcoa needs to continue its aggressive cost cutting, analysts have said.
On that front, Alcoa said it has now saved $872 million in costs and still expects to meet its goal of $1 billion in cost savings by the end of 2003.
Alcoa (AA: Research, Estimates) stock jumped to $26.90 in after-hours trading after adding 10 cents to $25.81 on the New York Stock Exchange during regular trading.
During the second quarter, the stock rose about 32 percent, outperforming the benchmark Standard & Poor's 500 index, which rose about 15 percent in the same period.
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