Alcoa's first-quarter profit growth but sales are not optimistic

Alcoa, the largest aluminum producer in the United States, announced better-than-expected first-quarter profits last night, but its revenue was lower than Wall Street's target. Revenue for the quarter increased by 22% to US$5.96 billion, thanks to rising prices of aluminum and alumina (for metal raw materials), but this was lower than Wall Street’s forecast of US$6.88 billion. Chairman and CEO Kefide told analysts that the company still expects aluminum demand in some industrial sectors worldwide to increase by 12% this year, including the increasing demand for aluminum from heavy trucks, and even more. In its report, Alcoa stated that it received income from its continuing operations, excluding special items, at 28 cents per share. This also exceeded analysts' expectations of 27 cents per share. The net profit for the first quarter was $308 million, compared with $201 million for the same period in 2010. Alcoa said that this improvement has benefited from the rise in aluminum and alumina prices. Aluminum prices have increased by more than 30% in the past year.