Alcoa’s quarterly profit has fallen short of expectation as worries about the global economy hurt aluminum prices.
The US-based aluminum producer on Tuesday reported third-quarter net income of $US172 million ($A173.27 million), or 15 cents per share for the quarter.
While better than net income of $US61 million, or six cents per share, a year earlier, the results were weaker than the second-quarter numbers and analysts’ forecasts.
The performance marked a disappointing start to the US earnings season.
Concerns about a slowdown in the global economy pushed down prices for aluminum by 12 per cent in the July-through-September period.
That weighed on the company, which makes everything from soft drink cans to aluminum sheets for aeroplanes and cars.
Analysts had repeatedly lowered the bar for Alcoa – scaling back their profit forecast by about a quarter in just the past month as aluminum prices slipped and demand in Europe weakened.
And yet the company still came up short. Analysts surveyed by FactSet had forecast earnings of 22 cents per share on revenue of $US6.24 billion.
Alcoa’s chairman and CEO, Klaus Kleinfeld, said the company did not see the usual September pickup in demand among European manufacturers, who usually ramp up production after the summer holiday season. He blamed that on concern about Europe’s debt crisis.
“I’m more concerned about lack of confidence than about market fundamentals,” Kleinfeld said on a conference call with investors.
“It almost looks like the world is worrying itself into another recession, and that shouldn’t be allowed to happen.”
The Pittsburgh-based company stuck to its forecast that aluminum demand will grow 12 per cent this year and double by 2020. It said demand in China was mostly offsetting weakness in Europe.
The company said that other than Europe, most markets kept growing although at a slower pace than in the first half of the year as hopes faded for a global economic recovery.
Revenue rose 21 per cent to $US6.42 billion. Analysts had expected $US6.24 billion.
Alcoa’s stock price fell even faster than aluminum – down 40 per cent in the quarter to its lowest levels since early 2009.
On Tuesday, Alcoa shares rose 21 cents, or 2.1 per cent, to close at $US10.30 before the results were released.
In extended trading, they fell 52 cents, or 5.1 per cent, to $US9.78.
Alcoa was the first company listed in the Dow Jones industrial average to report third-quarter results.
