Alcoa Posts Its Third Consecutive Quarterly Loss
NEW YORK: Aluminum producer Alcoa Inc. reported its third quarterly loss in a row Wednesday, as the global recession has crippled demand for the lightweight metal.The stock surged in after-hours trade, adding as much as 9%. In regular session trade, shares of Alcoa added 5 cents to close at 9.46.In the three months ended June 30, Alcoa (AA, Fortune 500) lost 454 million, or 47 cents per share, compared with a profit of 546 million, or 66 cents per share, in the same period a year ago.Excluding one-time restructuring charges and losses from discontinued operations, the company posted a loss of 26 cents per share, which was better than the forecast for a loss of 38 cents a share from analysts polled by Thomson Reuters. Analysts typically exclude one-time charges from their estimates.Sales fell 41% to 4.24 billion from 7.62 billion last year, beating analyst expectations of 3.93 billion.The company blamed the loss and drop in sales on a slowdown in the industries for which it provides raw materials — including automotive, commercial transportation, building, construction and aerospace — as well as a 49% drop in metal costs. The company boasted that its cost-cutting initiatives — such as previously announced headcount announcements and production cut-backs — were boosting its balance sheet. “Our cash generation initiatives, productivity improvements, and portfolio changes are working,” said Klaus Kleinfeld, Alcoa President and Chief Executive Officer, in a written statement. “Now Alcoa has the staying power and reduced cost base to withstand the most serious downturn in the history of the aluminum industry.” Alcoa is the first Dow component to release its second-quarter numbers. Investors look to the aluminum producer as a barometer of how corporations are faring during the recession.
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