Alcoa profits up slightly despite high energy costs

PITTSBURGH — Aluminum manufacturer Alcoa Inc. on Monday said third-quarter profit edged up 2 percent as lower aluminum prices and higher energy costs cut into profitability.

Alcoa’s net income rose to $289 million, or 33 cents per share, compared with a profit of $283 million, or 32 cents per share, during the same period last year. The results include a gain of 4 cents per share from the sale of railroad assets.

Sales grew to $6.57 billion, up 13 percent from $5.81 billion a year ago. Revenue for the first nine months of the year were $19.5 billion, a 13 percent increase from the same period in 2004.

The results surpassed the expectations of analysts surveyed by Thomson Financial, who had predicted 29 cents per share. That was down from an earlier estimate of 43 cents per share, which came after the company warned recently that third-quarter profits would range between 27 cents and 31 cents a share.

Alcoa, the world’s largest aluminum producer, said it faced falling aluminum prices and higher costs, particularly in energy and raw materials, during the quarter. Those costs were $578 million higher year-over-year, the company said. Seasonal weakness in Europe and automotive markets also hurt business.

“We have an aggressive productivity program, but it has not offset the impact of escalating costs in energy and raw materials and the speed at which they are flowing through,” said Alain Belda, Alcoa’s chairman and chief executive.

The company has been restructuring to trim costs. By the end of the third quarter, Alcoa eliminated more than 1,400 positions — part of a plan announced in the second quarter to cut 8,100 jobs and $195 million in expenses.

Shares of Alcoa fell 38 cents to close at $22.66 Monday on the New York Stock Exchange, then gained 54 cents, or 2.4 percent, in aftermarket activity.