Alcoa shines with surprise boost Alcoa, the world's second-largest aluminium producer by market capitalisation, delivered good news with first-quarter results on Tuesday, reporting a $94m post-tax profit instead of an expected loss thanks to productivity gains and unexpectedly healthy demand. The group also forecast continuing demand growth this year, with a particularly strong outlook for the aerospace sector. Net income fell 68 per cent compared with the first quarter of 2011, driven by a 9 per cent drop in Alcoa's average aluminium selling price over the year, and a rise in costs. Diluted earnings per share dropped 66 per cent to $0.09. However, that was still better than analysts" average forecast of a $0.04 loss. Chuck McLane, chief financial officer, said Alcoa had started the year with "an excellent first quarter." In the fourth quarter of last year, Alcoa reported its first loss for more than two years. The company is often seen as an indicator of the health of the global economy, because of the widespread use of aluminium in markets from drinks cans to airliners. It stuck with its forecast of 7 per cent growth in global aluminium demand this year, a slowdown from last year's 10 per cent increase. Alcoa raised its growth forecast for the aerospace market 3 percentage points to an increase of 13-14 per cent, however. It also expected other markets such as automotive, commercial transport, packaging and construction to grow. In the first quarter, the drop in aluminium prices was offset by a rise in shipments, which rose 7 per cent to 1.295m tonnes. Total revenues were up 1 per cent at $6.01bn. Post-tax operating income was down 73 per cent at $138m. Alcoa has been battered by the weakness of aluminium prices, which over the past decade have failed to pick up to the same extent as other metals, and that trend continued into the first quarter of this year. Post-tax operating profits from primary metals production fell 95 per cent to just $10m, although that was still better than the $32m loss reported for the fourth quarter of last year. Profits at the rolled products and engineered products divisions were both strong, however. Post-tax operating profits were $96m in rolled products such as aluminium sheet and plate, up 19 per cent, and $155m in engineered products such as wheels, fasteners and forged components, also up 19 per cent. Mr McLane said strong productivity gains were principally responsible for the better profitability in those divisions. The news provided an upbeat start for a US earnings reporting season, which analysts expect to show a fall in profits in most sectors. Only three of the 10 main sectors in the S&P 500 index - industrials, financials and technology - are expected to show earnings growth for the first quarter. Alcoa's shares fell 2.9 per cent on Tuesday, but rose 5.4 per cent after hours to $9.82. The shares have lost 45 per cent of their value in the past year, while the S&P 500 has risen 2 per cent over the same period.