Aluminum giant Alcoa said Tuesday it swung into profit in the first quarter as it slashed production to cope with a softer global economy and high commodity prices.
After the stock market closed, Alcoa, the first member of the blue-chip Dow Jones Industrial Average to report earnings this year, reported net income of $94 million, following a $191 million loss in the fourth quarter of 2011.
Excluding special items, Alcoa earned 10 cents per share, surprising analysts who on average estimated a loss of four cents.
Sales also beat forecasts, rising to $6.01 billion in the first three months of the year, slightly more than in the prior and year-ago quarters.
"Alcoa, Inc. has managed to pull a rabbit out of its hat," said Jon Ogg, an analyst at 24/7WallSt.com.
While an improvement, the first-quarter profit was sharply below the year-ago profit of $308 million.
The world's largest producer of aluminum said the quarter-on-quarter rebound was driven by strong productivity improvements across all its businesses, higher prices for aluminum, and a better volume and mix.
"Performance rebounded strongly this quarter due to our proactive cash sustainability actions, our relentless focus on profitable growth, and stabilizing markets," said Klaus Kleinfeld, Alcoa chairman and chief executive, in a statement.
Kleinfeld noted the company was executing an "aggressive strategy" to lower costs and improve profitability.
"Challenges remain in this economy, but we approach them better prepared than ever before," he said.
Just last week Alcoa announced a 4.0 percent cut in its refining capacity in the Atlantic region, which represents about 50 percent of the firm's global refining capacity of 18 million metric tonnes a year.
The company has been slashing smelting capacity in an effort to lower costs and become more competitive in the face of rising raw materials costs.
In early January the New York-based company said it would reduce smelting capacity by 12 percent, in a plan that shutters plants in Italy and Spain.
Shares in Alcoa closed 2.9 percent lower, at $9.32, in an overall bear market as investors awaited the company to kick off the first earnings season of the year.
Investors welcomed the better-than-expected results, sending shares up 0.5 percent in after-hours trade.
The global company, which transcends a range of sectors from aerospace and automotive to construction and consumer electronics, has 61,000 employees across 31 countries.
"This report truly was a surprise when you consider the recent news and caution out there about earnings from the first quarter," 24/7WallSt's Ogg said.