Alcoa profits plummet on weak demand
Alcoa employees leave corporate headquarters in Pittsburgh.
TEXT OF STORY
Bill Radke: The fallout from the financial crisis is showing up in earnings reports. And no, you don't want to know, but I have to tell you. The first blue chip to report was aluminum maker Alcoa. The company announced after the bell yesterday a quarterly loss of more than $1 billion. From New York, here's Marketplace's Jeremy Hobson.
Jeremy Hobson: This is what happens when your product is used primarily in planes, cars and construction. Those industries have pretty much collapsed, and that's sending aluminum prices tumbling.
Marco Georgiou: The drop over the last quarter has been so significant. Not just in North America -- in China as well.
Marco Georgiou covers the aluminum market for CRU Analysis in London. He says the demand-driven drop in price is being exacerbated by ever increasing stocks of aluminum that nobody needs.
Georgiou: You've got huge amounts of stock available in the markets and weak demand at the moment. So you need stronger demand, which will help to work through some of these backlevels.
Aluminum's saving grace, he says, is food packaging -- AKA beverage cans. Even that remains flat.
Until an economic recovery comes, cutbacks seem to be the way forward for Alcoa. The Pittsburgh-based company just announced plans to lay off 13 percent of its workforce.
In New York, I'm Jeremy Hobson for Marketplace.