Alcoa, the largest US aluminum producer, has reported better than expected first-quarter profits.
Revenue in the quarter rose 22 per cent to $5.96 billion, helped by rising prices for aluminum and alumina - the raw material for the metal - but it lagged behind the Wall Street forecast of $6.08 billion.
Also, Alcoa's output of alumina, or aluminum oxide, used in the production of aluminum metal, dipped slightly in the first quarter to 4.0 million metric tons from 4.2 million in the fourth quarter of 2010.
The company's shares, which have risen almost 40 per cent in the last six months, fell 3.4 per cent to $17.17 in after-hours trading on the New York Stock Exchange.
Chairman and chief executive Klaus Kleinfeld told Wall Street analysts the company still expected global aluminum demand to grow by 12 per cent this year with some industrial sectors, such as heavy trucks, growing even more.
"We expect the aerospace market to grow 7 per cent in 2011 - that's actually up 1 per cent from our previous estimate," he said, adding it was driven by Boeing and Airbus having a production backlog of six years.
For the car sector, Mr Kleinfeld said: "If the recovery continues to be strong, we expect overall on a global basis growth between 5 per cent to 11 per cent."
For heavy trucks and trailers, Alcoa has increased its growth estimate to a range of 5 per cent to 10 per cent and for North America, Mr Kleinfeld said he was projecting truck and trailer growth at the rate of 45 per cent to 50 per cent this year.
The beverage can segment, he said, was expected to be flat globally, while the weakest sector is still commercial building and construction, with moderate weakness in North America and Europe despite healthy growth in China.
"In North America we expect further contraction of minus 4 per cent to minus 8 per cent. That pretty much shows that when it comes to commercial building and construction in North America, that's a pretty fragile market still."
In its earnings release, Alcoa said income from continuing operations, excluding special items, was 28 cents a share. That topped analysts' expectations of 27 cents a share, according to Thomson Reuters.
Net first-quarter earnings were $308 million, or 27 cents per share, compared with a net loss of $201 million, or 20 cents per share in the same quarter of 2010, the Pittsburgh-based company said. Alcoa said the improvement was driven by higher realized prices for aluminum and alumina.
The price of aluminum has climbed more than 30 per cent in the past year, from around $1,990 per tonne during the first quarter of 2010.
Reuters