, the world's biggest producer of aluminum and related products, reported a sharp 57% jump in second-quarter earnings Monday, beating Wall Street estimates as the company implemented major cost-cutting efforts.
Alcoa earned 47 cents a diluted share in the second quarter, up from 34 cents a share in the second quarter of 1999, beating the consensus of analysts' estimates for a profit of 45 cents a share, according to
First Call/Thomson Financial
. Net income totaled $377 million, up from $240 million in the year-earlier period.
Alcoa said the strong earnings were helped by ongoing cost-cutting efforts that started in mid-1998, when the company targeted $1.1 billion in annualized cost savings. The company said it has thus far achieved $884 million in annual savings, and expects to reach its target by the end of this year.
A year-over-year increase in aluminum prices and a pickup in demand also helped drive earnings higher, offsetting costs related to acquisitions and higher prices for energy, a major factor in aluminum production.
Shares of Alcoa, one of the 30 components of the
Dow Jones Industrial Average
, rose a sharp 7% on the news, climbing 1 7/8 to settle at 29 1/2.
The Pittsburgh-based company said its revenue rose 40% in the second quarter to $5.6 billion vs. $4 billion in the year-earlier period.
The results were diluted by two months of operating results from
and one month of results from
, both of which were acquired in the second quarter. The report did not include earnings from Reynolds assets that Alcoa had agreed to sell as part of that acquisition.
Though the acquired companies were dilutive to earnings in the second quarter, the company said it expects Reynolds and Cordant operations to add to its net earnings for its full-year results.