(Jamaica Gleaner) – Alcoa Inc said on Tuesday it lost US$497 million during the first quarter, as the global economic crisis continued to erode prices and demand for the lightweight metal.
The loss was Alcoa’s second in the past two consecutive quarters and underscored the deterioration of aluminium-intensive industries such as autos and construction.
Orders for the metal, used in everything from cars and airplanes to windows and soda cans, began sliding last fall as the world economy weakened.
Stockpiles grew, prices plunged and aluminum makers started scaling back production worldwide. Analysts say plants are losing money, but that prices may recover modestly this summer.
Alcoa, the first blue chip company to report earnings for the quarter, and considered an indicator of upcoming results from other firms, said its quarterly revenue dropped 44 per cent to US$4.15 billion from US$7.38 billion during the same period last year.
In response to the tough market conditions, Pittsburgh-based Alcoa has taken measures to bolster its balance sheet and lower costs in recent months.
Days before reporting its first quarterly loss in six years in January, Alcoa announced plans to shed 13 per cent of its global work force, sell four business units and substantially reduce production.
The company took further steps in March, when the aluminum maker – the world’s third-largest – cut its dividend for the first time in more than two decades, unveiled plans to sell stock and debt, and pledged to slash costs by more than US$2.4 billion annually.
Alcoa, which makes aluminum and uses it to manufacture products such as truck wheels and fighter jet parts, announced the latest of several production cuts last week, saying it would reduce output at a smelter in New York.
That move would bring total cuts to about 20 per cent of annual output, Alcoa said.