Alcoa's third-quarter net income disappoints

DALLAS (AP) - Alcoa got the earnings season off to a disappointing start.

The aluminum producer on Tuesday reported third-quarter net income that fell far short of expectations. Concerns about a slowdown in the global economy pushed down prices for aluminum by 12 percent in the July-through-September period. That weighed on the company, which makes everything from soda cans to aluminum sheets for airplanes and cars.

Alcoa's net income totaled $172 million, or 15 cents a share, for the quarter. While better than net income of $61 million, or 6 cents per share, a year earlier, the results were weaker than the second-quarter numbers and analysts' forecasts.

Analysts had repeatedly lowered the bar for Alcoa - scaling back their profit forecast by about one-fourth in just the past month as aluminum prices slipped and demand in Europe weakened. And yet the company still came up short: analysts surveyed by FactSet expected the company to earn 22 cents per share.

Few other companies are so dependent on aluminum prices. But the forces behind the falling prices, including concerns the world's economy and European debt crisis, won't just hurt metals companies.

"Some of the global macro concerns that are weighing on aluminum prices and hurting Alcoa's earnings - that sentiment is likely to play out across other sectors," said Morningstar analyst Bridget Freas.

Freas thinks prices are near their bottom but that Alcoa's fourth-quarter profit could be slimmer than the third quarter's.

Alcoa's chairman and CEO, Klaus Kleinfeld, said the company did not see the usual September pickup in demand among European manufacturers, who usually ramp up production after the summer vacation season. He blamed that on concern about Europe's debt crisis.

"I'm more concerned about lack of confidence than about market fundamentals," Kleinfeld said on a conference call with investors. "It almost looks like the world is worrying itself into another recession, and that shouldn't be allowed to happen."

The Pittsburgh-based company stuck to its forecast that aluminum demand will grow 12 percent this year and double by 2020. It said demand in China was mostly offsetting weakness in Europe.

The company said that other than Europe, most markets kept growing although at a slower pace than in the first half of the year as hopes faded for a global economic recovery.

Revenue rose 21 percent to $6.42 billion. Analysts had expected $6.24 billion.

Alcoa's stock price fell even faster than aluminum - down 40 percent in the quarter to its lowest levels since early 2009.

On Tuesday, Alcoa shares rose 21 cents, or 2.1 percent, to close at $10.30 before the results were released. In extended trading, they fell 52 cents, or 5.1 percent, to $9.78.

Alcoa was the first company listed in the Dow Jones industrial average to report third-quarter results.

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