Aluminum manufacturer Alcoa Inc. said Monday that its first-quarter profit more than doubled to $608 million, beating analysts' estimates, as metal prices surged. Its shares rose nearly 6% in after-hours trading.
Net income rose to 69 cents a share from 30 cents a share, or $260 million, a year earlier, Pittsburgh-based Alcoa said. Sales rose 16% to $7.24 billion.
Aluminum prices were up 29% on average during the quarter, reaching a 17-year high in February. Chief Executive Alain Belda has shed jobs and closed plants such as a Maryland smelter to cut expenses and to shift production to countries with cheaper energy and raw-material costs.
"It's the metal price that's clearly driving it," said Charles Bradford, an analyst with Soleil Securities. "To some extent, costs are better, but metal prices are the game for an aluminum company."
The average estimate of 13 analysts surveyed by Thomson Financial was for profit of 51 cents a share.
Shares of Alcoa rose in after-hours trading. The stock reached $34.75, up $1.92, or 5.8%, from Monday's closing price of $32.83, which was the highest in 16 months. The stock has risen 46% since reaching a two-year low in October.
Profit after tax in the raw aluminum business almost doubled to $445 million from $225 million, as Alcoa sold metal at prices that on average were up 24% and as costs for raw materials such as natural gas and caustic soda fell, the company said. The alumina business had profit of $242 million, compared with $161 million a year earlier, Alcoa said.
Aluminum for delivery in three months averaged $2,446.50 a metric ton on the London Metal Exchange during the first quarter, compared with $1,890.70 a year earlier. Prices reached a high of $2,678.10 on Feb. 7.