Lower Aluminum Prices Cause Alcoa Net to Drop

Aluminum Co. of America said its third-quarter earnings declined 5% from last year, mainly because of low aluminum prices worldwide.

The company said its net earnings in the quarter ended Sept. 30 totaled $57.1 million, compared to a profit of $60.1 million in the same period of 1984. Revenue slipped to $1.28 billion from $1.44 billion.

“Earnings for the third quarter, though inadequate, were above expectation,” Chairman Charles M. Parry said in a statement. “Business softened from the second quarter to the third, with a 6% decline in shipments and with continuing price weakness in both aluminum ingot and fabricated products.”

Alcoa’s earnings for the first nine months of the year dropped 61% to $104.3 million from $270.8 million for the same period of 1984. Revenue declined to $4 billion from last year’s $4.4 billion.

Parry said Alcoa expected little improvement in aluminum prices and orders.

“Excessive aluminum producer inventories worldwide are declining at a slow rate,” he said. “Further reductions in operating rates worldwide or a substantial increase in demand is needed to accelerate the inventory run-off.”

Third-quarter shipments declined 16% from 439,000 tons to 432,000 tons. Shipments over the nine-month period declined 3% to slightly more than 1.3 million tons.