INSTANT VIEW: Alcoa third-quarter profit falls

NEW YORK (Reuters) - Aluminum producer Alcoa Inc (AA.N) said on Tuesday that third-quarter profit fell as a result of the sharply lower price of aluminum.

Net earnings were $268 million, or 33 cents per share, compared with $555 million, or 63 cents per share in the same quarter of 2007, the Pittsburgh-based company said.

The following are comments on the results:

BRIAN HICKS, CO-MANAGER OF THE GLOBAL RESOURCES FUND AT U.S. GLOBAL INVESTORS

"It's quite disappointing. Considering that the estimates were roughly 70 cents in August and have been coming down steadily ... before the report.

"And they missed ex-items, which came in at 37 cents. That's a pretty dramatic shortfall.

"I think it's reflective of how quickly economic conditions seem to be deteriorating. A lot driven by the credit freeze.

"It's definitely going to weigh on the market even though we've already had a considerable pullback of the major indices.

"A lot of analysts are going to have to reconsider their estimates for 2009 for Alcoa and perhaps the market in general because it seems like more data points are showing weakness.

"They are stopping their share buyback program, taking measures to preserve liquidity.

"The sad thing here is that I don't think Alcoa is going to be alone this earnings season.

"I think there will be quite a few earnings misses due to the fact that it looks like conditions have weakened much more than people expected."

JONATHAN PAVLIK, PORTFOLIO MANAGER, STEWART CAPITAL

"I think this is probably going to be the first of many companies that come out and say something along the lines of what Alcoa did, which is they're taking steps to preserve their cash and just trying to keep their balance sheet strong.

"I think a lot of people thought this is mostly just a financials company phenomenon -- everybody talking about conserving capital or raising capital -- but I think a lot of companies are going to come out and say the same thing.

"Once again, unfortunately, it looks like the demand for aluminum is starting to wane here a little bit, and the prices of aluminum are also going down, while I think they said the input costs are still going up, so that's a tough spot for them to be in as far as their margins go."