A bull market for aluminum helped
first-quarter earnings more than double from a year ago.
Alcan earned $453 million, or $1.20 a share, in the quarter compared with $218 million, or 58 cents a share, a year ago. On an adjusted basis, the company earned $1.26 a share in the latest quarter, 19 cents better than the Thomson First Call consensus estimate.
First-quarter sales rose 7% from a year ago to $5.55 billion, missing the $5.7 billion Thomson First Call estimate. Alcan said total aluminum volume rose slightly from a year ago due to additional production related to a plant expansion and smelter restart. Higher sales mainly reflected higher aluminum prices, it said.
"The underlying fundamentals of the aluminum industry are currently robust and should remain solid over the balance of the year," Alcan said. "With continued focus on operating excellence and financial discipline, we are confident that Alcan is well positioned to reap the benefits.
"Moreover, cost-pressures are stabilizing and our selling, administrative and general expenses are beginning to show the benefits of a focused campaign to improve efficiency," it said. "We are making progress toward our financial objectives and ... look forward to continued improvement."
For 2006, Alcan estimated that world primary aluminum consumption will rise by about 5.1%, following a 4.5% gain in 2005, while production from new capacity and restarts is expected to increase world supply by about 4.1%. "As a consequence, the Company continues to expect a market deficit of approximately 300 thousand tonnes in 2006 vs. the balanced situation in 2005."