The Wall Street doomsday prophets may want to revisit their crystal balls: Metals producer Alcoa Inc. launched the first quarter earnings parade -- which many analysts had worried would be a dud -- with a profit.
The aluminum company had posted a loss in its fourth quarter, but income from continuing operations rose $287 million to $94 million, or 9 cents a share, in the first quarter due to “strong productivity growth and improved market conditions.”
Year over year, however, profit plunged from the $309 million, or 27 cents a share, from the first quarter of 2011.
Revenue in the first three months of this year jumped to $6 billion, up just a bit from both the fourth quarter and the first quarter of last year, according to Alcoa’s announcement Tuesday after markets closed. Year-over-year growth came in markets that use Alcoa's metals such as commercial transportation, aerospace and autos.
And this year, Alcoa continues to forecast a global aluminum supply shortage, which the company believes will boost demand by 7% as prices drop.
As the first Dow company to post first-quarter earnings results, Alcoa’s news was closely watched. Analysts had worried that a slump in earnings at major companies might give pause to an overall, multi-quarter upward trend.
But “stabilizing markets” helped perk things up, said Alcoa Chief Executive Klaus Kleinfeld in a statement.
“Challenges remain in this economy, but we approach them better prepared than ever before,” he said.
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