Alcoa's profit off but tops forecasts : US Business

NEW YORK (Reuters) - Aluminum producer Alcoa Inc on Tuesday posted a smaller-than-expected drop in second-quarter profit, lifting its shares, as higher aluminum prices and sales volumes offset higher costs.

Net earnings were $546 million, or 66 cents per share, compared with $715 million, or 81 cents per share, in the same quarter last year, the company said.

The profit was 2 cents better than the 64 cents per share analysts expected on average, according to Reuters Estimates.

Sales in the quarter fell to $7.62 billion from $8.07 billion a year earlier, but topped analysts forecasts for sales of $7.23 billion.

"Sales were $30 million ahead of estimates, so I guess that helped a little bit. It looked like each segment had positive comparisons to the first quarter, with the improvement on a sequential basis entirely due higher prices." said Charlie Smith, chief investment officer, Fort Pitt Capital Group.

A "force majeure" caused by a gas supply disruption in Australia and the idling of its Rockdale, Texas, smelter because of local power supply problems led to a charge of $39 million, or 5 cents per share, in the quarter.

(Reporting by Matt Daily, additional reporting by Steve James; Editing by Gary Hill)

(c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.