AP reported that Alcoa Inc unofficially opened the earnings season by posting a loss of USD 454 million, citing continued weak prices and demand for its aluminum products amid the global recession. But the loss was narrower than expected.

It was Alcoa’s third straight quarterly loss and fresh evidence of slumping orders from key customers in the aerospace, automotive and construction industries.

US aluminum giant Alcoa reduced its loss to USD 454 million in the second quarter from USD 497 million in Q1. In Q2 of 2008 the company made USD 616 million in profits.

Sales amounted to USD 4.24 billion in Q2 as compared to USD 4.15 billion in the previous quarter and USD 7.25 billion in Q2 of 2008.

Costs fell to USD 4.67 billion in the recent quarter from USD 4.92 billion in Q1 and USD 6.39 billion YoY.

Primary aluminum output reached 906,000 tonnes in Q2 as compared to 880,000 tonnes in Q1 of 2009 and 1.03 million tonnes in Q2 of 2008.

Alcoa executives credited the results to the company’s efforts to slash costs and conserve cash in recent months. They pointed to signs that some aluminum markets may be stabilizing but reiterated an earlier estimate that the aluminum industry will shrink seven per cent this year.

Alcoa has scaled back its production by about 20%. It has undertaken a campaign to cut costs and raise cash, announcing 13,500 job cuts and the planned sale of four business units earlier this year.

Alcoa said that in April, it had agreed to sell a business that makes electrical systems for automobiles to Platinum Equity, a Los Angeles based private equity firm, for an undisclosed amount.

Mr Klaus Kleinfeld president and CEO of Alcoa said that the company’s ongoing efforts to cut costs and raise cash are working.”

He said that still, the largest US aluminum producer, which makes the metal and uses it to manufacture products such as truck wheels and fighter jet parts, is maintaining its forecast of an industry wide contraction of 7% this year.

Aluminum makers have struggled since last year with sharply lower orders for the metal used in products ranging from beer cans to jumbo jets. The weaker demand has driven up stockpiles and depressed prices of the metal and many aluminum makers have responded by curbing production. Analysts said that demand is picking up but excess supplies will keep prices relatively low in the months ahead.

(Sourced from Associated Press)