Company News: Alcoa profits increase 60 percent

Aluminum producer Alcoa Inc. on Tuesday said fourth-quarter profit jumped 60 percent, driven by higher metal prices and strong market demand.

Net income increased to $359 million, or 41 cents per share, from $224 million, or 26 cents per share, during the same period a year earlier. The results include after-tax charges of $386 million, or 44 cents per share, for costs related to a restructuring program that includes the elimination of 6,700 jobs.

Income from continuing operations was $258 million, or 29 cents per share. Excluding restructuring and impairment charges, the company earned $644 million, or 74 cents per share.

Revenue grew 20 percent to $7.84 billion from $6.54 billion a year ago.

The results exceeded Wall Street expectations. On average, analysts polled by Thomson Financial forecast earnings of 65 cents per share on sales of $7.63 billion from continuing operations.

“General Motors Corp. Vice Chairman and product czar Robert Lutz said Tuesday that the auto maker reduced its fleet sales to rental car firms by 100,000 vehicles last year and expects the same reduction in 2007 as the company looks to boost the resale value of its cars.

Lutz, speaking to reporters on the sidelines of the North American International Auto Show, said GM’s strategy of reducing less-profitable fleet sales and lowering incentives will further pressure its overall market share.

But he said the moves are necessary to reverse what he called “damaging” sales and marketing practices early in the decade. The idea is to remove “the last excuse” for consumers not buying an American car.

“Northwest Airlines moved closer to buying out its bankrupt feeder carrier Mesaba Aviation on Tuesday by making an agreement with Mesaba’s corporate parent.

Terms of the deal between MAIR Holdings Inc. and Northwest Airlines Corp. weren’t immediately disclosed.

Attorneys for Mesaba’s unsecured creditors announced the deal in bankruptcy court on Tuesday.

The creditors were in court to ask permission to propose their own reorganization plan for Mesaba because they claimed MAIR was dragging its feet.

Northwest has said it plans to acquire the feeder airline in exchange for giving Mesaba a $145 million unsecured claim in Northwest’s bankruptcy case.

The deal will leave MAIR with however much of the claim it recovers after payments are made to creditors.