Alcoa posts $1.19 billion fourth-quarter loss

Alcoa Inc has posted a net loss of $1.19 billion in the fourth-quarter of 2008, compared with a profit of $632 million in the same quarter of 2007.

Lower demand and declining metal prices forced the company into its first loss in six years although revenues took a stand and were $700 million above market expectations, having fallen 19%, from $7.0 billion to $5.7 billion.

The result takes into account $1 billion in charges linked to restructuring, impairment and a cost reduction strategy.

According to Alcoa, aluminium prices declined 35% during the quarter as demand dropped sharply in response to the global economic slowdown, particularly in the automotive, commercial transportation and building and construction sectors.

The price of the metal peaked in July of last year and has since fallen by over 50%.

Alcoa’s president and chief executive officer, Klaus Kleinfeld, has promised wide-ranging measures to address the economic downturn.

The company has already reduced aluminium production by 18% and will be cutting 15,000 jobs.

It has also embarked on a programme of disposals and is in the process of selling four businesses.