Aluminium producer Alcoa reported a second consecutive quarterly loss yesterday, as metal prices and the autos industry slumped and global demand fell in the economic downturn.
The first-quarter net loss was $497 million, or 61 cents per share, compared with a profit of $303 million, or 37 cents per share, in the same quarter of 2008, the Pittsburgh-based company said. The loss from continuing operations was 59 cents per share.
Revenue fell 36 percent to $4.1 billion from $6.5 billion a year earlier after excluding divested businesses.
Analysts on average were expecting a loss of 55 cents per share, with revenue of $4.11 billion, according to Reuters Estimates.
But Alcoa shares were down slightly in after-hours trading as Alcoa Chief Executive Klaus Kleinfeld said he believed the current government economic stimulus packages would spark a surge in aluminium demand.
"While our financial performance in the quarter was adversely affected by the economy-driven drop in demand, we launched operational and financial measures that will significantly improve our profitability and cash flow in 2009 and beyond," the CEO said in a press statement.
"We also see both near-term and long-term catalysts that should improve the prospects for the aluminium industry," he said. "Current stimulus programs that target infrastructure and energy efficiency will create a demand for ... aluminium.
"Longer term, the global megatrends of population growth, urbanization, and environmental stewardship will all drive demand for aluminium as the economy improves."
Alcoa said the sharp drop in revenue resulted from the impact of the economic downturn on Alcoa's end markets - automotive, transportation, building and construction and aerospace, the company said.
As demand weakened, realized metal prices fell an additional $558 per ton resulting in prices that are now about 60 per cent lower than last summer.
Reuters