Alcoa surprises Wall Street with first-quarter profit NEW YORK (Reuters) - Aluminum producer Alcoa Inc on Tuesday surprised Wall Street with a first-quarter profit after a loss in the fourth quarter of 2011 as a result of improved market conditions. The results, which beat analysts' forecast for a loss, sent the company's stock up 6 percent to $9.80 in after-hours trading on the New York Stock Exchange. Alcoa said income from continuing operations in the first quarter was $94 million, or 9 cents per share, compared with a profit of $309 million, or 27 cents per share in the same quarter last year. Revenue rose slightly to $6 billion, Pittsburgh-based Alcoa said. Analysts on average were expecting a loss of 4 cents per share and revenue of $5.77 billion, according to Thomson Reuters I/B/E/S. Results from Alcoa, the first company in the Dow Jones industrial average to report earnings for the March quarter, are considered a bellwether for the rest of the materials sector. "Performance rebounded strongly this quarter due to our proactive cash sustainability actions ... focus on profitable growth, and stabilizing markets," said CEO Klaus Kleinfeld. But he said: "Challenges remain in this economy." Alcoa said the improvement over the fourth quarter was driven by strong productivity improvements across all businesses, higher realized prices for aluminum, and improved volume and mix. These were offset somewhat by a lower realized alumina price and higher input costs, the company said. A 9 percent drop in the realized price of aluminum was partially offset by third-party shipments in the upstream businesses, better volume and mix in the midstream business, and improved volume in the downstream business, Alcoa said. Alcoa's stock price has fallen 46 percent since April 2011 -- mostly on a drop in global aluminum prices -- prompting the company to cut the performance-based element of Kleinfeld's 2011 compensation by 45 percent. Aluminum prices are down almost 20 percent from a year ago but have been creeping up this year, reaching $2,126 per tonne on March 31 from $2,020 on January 1. The company has already cut back aluminum production and last week said it would reduce production of alumina, a key raw material, by 4 percent. Reporting By Steve James; Editing by Bernard Orr