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Alcoa swings to profit as cost cuts kick in

An employee at Alcoa Warrick Operations inspects finished rolls of aluminum.

DANIEL R. PATMORE/AP

Alcoa Inc. reported a fourth-quarter profit on Tuesday, in line with analysts' expectations, as cost cuts helped offset a drop in realized aluminum prices.

Shares of Alcoa rose 1.2 per cent to $9.21 (U.S.) in after-hours trading.

For the fourth quarter, the company reported net income of $242-million, or 21 cents per share, compared with a net loss of $191-million, or 18 cents per share, in the year-ago period.

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Excluding one-time items, net income was $64-million, or 6 cents per share, in line with average analysts'expectations of 6 cents a share on revenue of $5.6-billion, according to Thomson Reuters I/B/E/S.

Sales were $5.89-billion, beating analysts' expectations, but down 1.5 per cent from the year-ago quarter as the average realized price per tonne of aluminum fell slightly.

Alcoa said it expects global aluminum consumption growth of 7 per cent in 2013, up slightly from 6 per cent in 2012. The company continues to forecast a doubling of global aluminum demand between 2010 and 2020.

Investors tend to scrutinize Alcoa's results for hints on where the overall economy is headed, as the company's aluminum products are used in the automotive, appliance and airline industries.

Alcoa forecasts global growth in the aerospace, automotive and construction markets, among other industries.

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