Alcoa’s profit up on solid demand

Aluminum giant Alcoa Inc. kicked off first-quarter earnings season Tuesday with an upbeat report: The company said it had its most profitable first-quarter ever, as increased demand from China and the aerospace industry boosted prices.

Net income rose 8.9% to $662 million, or 75 cents a share, from $608 million, or 69 cents, a year earlier, New York-based Alcoa said. Sales jumped 11% to $7.9 billion.

The company’s shares, which added 3 cents to $34.90 in regular trading, surged to $35.72 after hours, following the report.

Aluminum prices rose 15% in the quarter. Alcoa is boosting output from Iceland to Brazil to meet rising demand for aluminum in cans, aircraft parts and construction materials.

“The aerospace business is really where Alcoa is making the margins and getting in a position to capture growth,” said Scott Burns, an analyst at Morningstar Inc. in Chicago.

Economic growth in China, the world’s largest user of aluminum, also has fueled construction of bridges, skyscrapers and power-transmission lines that use the metal.

Excluding restructuring costs and a loss of 2 cents a share from discontinued businesses, Alcoa’s profit was 79 cents a share. That beat the 78-cent estimate of 15 analysts in a Bloomberg survey.

World demand for aluminum will probably rise about 7.7% this year, fueled by consumption in Asia and Europe, Alcoa Chief Executive Alain Belda said on a conference call.

Alcoa usually is the first major U.S. company to report quarterly results.

Wall Street in recent months has sharply reduced expectations for first-quarter corporate profit growth, amid signs of a slowing U.S. economy.

Total operating earnings of companies in the blue-chip Standard & Poor’s 500 index are expected to be up 5% from a year earlier, S&P; said in a report Monday. The estimate had been 8.2% at the start of the quarter.