Alcoa Inc. income drops 21 percent on lower metals prices and aluminum shipments

Alcoa 3Q income dips 21 percent

NEW YORK — Alcoa Inc. said Thursday its net income slid about 21 percent in the third quarter on higher foreign exchange and energy costs.

The Pittsburgh aluminum maker on Thursday reported net income of $61 million, or 6 cents per share, for the three-month period ended Sept. 30. That compares with earnings of $77 million, or 8 cents per share for the same period last year. Revenue increased 14.6 percent to $5.3 billion.

The results beat Wall Street expectations of 5 cents a share on revenue of $4.95 billion.

Alcoa, which supplies a variety of manufacturers including the auto and aerospace industries, is one of the first companies to report financial results for the quarter, and economists use its results to get an early read on the health of the economy.

Chairman and CEO Klaus Kleinfeld said he sees signs that the global economy continues to recover from the recession. Alcoa increased its aluminum consumption forecast to 13 percent from 12 percent for 2010.

“In countries such as China, Brazil, India, and Russia, more and more people are moving into the middle class, driving demand in building and construction, transportation, and packaging,” Kleinfeld said in a statement. “This trend favors aluminum as it is light, strong, and infinitely recyclable.”

Alcoa said aluminum prices increased nearly 15 percent year-over-year to $2,261 per metric ton. However, increased foreign exchange costs, energy costs and other expenses helped push the company’s net income lower.

Consumers won’t see higher aluminum prices soon, said David Silver, an analyst with Wall Street Strategies. Auto makers and other major manufacturers already have locked in aluminum prices with supply contracts that extend into 2011 and 2012, but they may raise prices of consumer products during the next few quarters if aluminum prices continue to rise, he said.

Alcoa shares rose 35 cents, or 2.9 percent, to $12.55 in after-hours trading.