Alcoa Profit Rises 5.3%, Beating Expectations

Alcoa Inc. said its earnings rose a better-than-expected 5.3% as recent acquisitions helped the world’s biggest aluminum producer combat low metal prices with increased shipments and cost cuts. Alcoa, the first of the Dow 30 companies to report results for the quarter, said it earned $221.1 million, or 60 cents a share, up from $209.9 million, or 62 cents, a year ago. Per-share earnings declined because Alcoa increased the number of its common shares outstanding with its purchase of Alumax in July. The performance topped the 54 cent average estimate of analysts polled by First Call Corp. Sales increased 16% to $3.98 billion, reflecting the acquisition of Alumax and Spain’s Inespal last year. Alcoa weathered an 18% drop in aluminum prices and a recession in Brazil with a 46% jump in shipments and cost savings realized from the acquisitions, while other aluminum companies have warned of disappointing first-quarter results. Alcoa plans to trim about $1.1 billion from expenses through 2000, mainly by improving efficiency at acquired and existing plants. Shares in Pittsburgh-based Alcoa rose $2.94 to close at $44 on the New York Stock Exchange.