Alcoa profit tops estimates

Alcoa, the world's third-largest aluminium producer, reported second-quarter profit that topped analyst estimates as the company raised prices. The shares gained in after-hours trading.
 
Chief executive Klaus Kleinfeld, who took over in May, has boosted prices to help make up for rising energy expenses, which account for about a third of the cost of producing aluminium. Alcoa sold aluminium for an average $US3058 a ton in the quarter, about 6.2% higher than a year earlier.

Net income for the quarter fell to $US546 million, or 66 cents a share, from $US715 million, or 81 cents, a year earlier, New York-based Alcoa said in a statement. Sales fell 5.5% to $US7.62 billion after the company sold its packaging unit.

Excluding a charge of 5 cents a share because of lost production at a refinery in Australia and a smelter in Texas, profit was 71 cents a share, topping the 65-cent average estimate of 17 analysts in a Bloomberg survey.

The shares gained $US1.02, or 3.2%, to $US33.35 in trading after the official close of the New York Stock Exchange.

Prices Gain

Aluminium prices on the London Metal Exchange averaged 6.9% higher in the second quarter than a year earlier and reached a record $US3327 a metric ton yesterday.

Alcoa teamed up with Aluminum Corp. of China, also known as Chinalco, to buy a 12% stake in Rio Tinto in February, and Alcoa now is seeking more joint ventures in China, the Middle East and North America.

Alcoa expects to add as much as 50 cents to earnings per share in 2008 through new mining and metal investments, including the expansion of the Fjardaal smelter in Iceland.

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