Blaming higher energy costs and weaker demand in several key markets,
, the world's largest aluminum maker, warned Monday that it expects to fall at least 12% short of Wall Street's earnings expectations in its third quarter.
Alcoa, based in Pittsburgh, said it anticipates earnings of $350 million, or 40 cents a share, to $380 million, or 43 cents a share, in the third quarter. That's up from earnings of 35 cents a share in the comparable period of 1999, but sharply below analysts' prediction of 49 cents a share, according to
First Call/Thomson Financial
Earnings, moreover, are likely to sink below the $377 million posted in the second quarter, as the company grapples with a slowdown in the transportation, building, construction and distribution markets and higher costs of natural gas and fuel oil, according to Alcoa.
Shares of Alcoa dropped $1.34, or 5%, at $27.25 ahead of the announcement, which was made after the market closed. Alcoa's stock price was virtually unchanged at $27 in after-hours trading, according to
Alcoa's chief executive, Alain Belda, said the company had at least partially offset higher energy costs "as well as initial softening in key markets" with cost-saving initiatives. "However, as these markets continued to decline in the third quarter, it became likely that even with our efforts," profits would fail to fulfill expectations, Belda said in a statement.
Alcoa is scheduled to release its earnings Oct. 5.
Belda said in a statement that "strength in aluminum prices, the continued integration of recent acquisitions, the cost-reduction program and the seasonal strength of our packaging and consumer business" would help the company to get back on track in the fourth quarter.