NEW YORK Weaker aluminum
prices on the London Metal Exchange and lower sales volumes
weighed on Alcoa Inc.s revenue in the first quarter, but
productivity improvements and a more favorable value-added
product mix helped to boost the companys net income
compared with the same period last year.
"This was a strong quarter led
by record profitability in our downstream business, improved
results in our midstream business and remarkable upstream
performance in the face of weak metal prices," Klaus Kleinfeld,
Alcoas chairman and chief executive officer, said in a
Pittsburgh-based aluminum producer posted net income of $149
million for the three months ended March 31, up 58.5 percent
from $94 million a year earlier but down 38.4 percent from $242
million in the final three months of 2012. Sales were down 2.9
percent from a year earlier and 1.1 percent from the previous
quarter to $5.83 billion.
Alcoas latest results
included an income tax benefit, the positive impact of
mark-to-market changes on some energy contracts and an
insurance recovery related to a March 2012 fire in Massena,
amm.com, March 30), the company said.
Alcoas shipments totaled
1.224 million tonnes in the first quarter, down 5.5 percent
from 1.295 million tonnes in the same quarter last year and 4.4
percent below 1.280 million tonnes in the fourth quarter.
Alcoa largely attributed the dip
in revenue to lower LME aluminum prices and the impact of
curtailments at some of its European primary operations. LME
cash aluminum prices averaged $1,912.78 per tonne last month,
marking a return to lows last reported in August.
But although commodity prices
have taken a hit recently, Alcoa maintains the aluminum
industry will grow this year, executive vice president and
chief financial officer William Oplinger said in a conference
call following the release of the companys earnings
report. "Money has been thrown into equities and out of
commodities, driving down commodity prices, and aluminum is no
exception," he said.
However, Alcoa argues that the underlying fundamentals for
the aluminum market have not changed, reiterating April 8 that
aluminum demand will still grow 7 percent this year on the back
of strong automotive and aerospace markets and tightening