INSTANT VIEW: Alcoa quarterly profit falls

NEW YORK (Reuters) - Aluminum producer Alcoa Inc (AA.N) said on Monday that first-quarter profit was cut in half from a year ago because of higher energy and raw material costs and a weak dollar, which offset a surge in the metal's price.

Income from continuing operations, excluding restructuring and tax impacts, were $361 million, or 44 cents per share.

Revenue fell to $7.4 billion from $7.9 billion a year earlier, Alcoa said.

Analysts on average were expecting earnings of 49 cents per share and revenue of $7.388 billion, according to Reuters Estimates.

The price of aluminum on the London Metal Exchange slipped below $2,500 per metric ton at the beginning of the year but has risen since February and on Monday gained $17 to $2,970.

COMMENTS:

PAUL MOOMAW, PORTFOLIO MANAGER, HESTER CAPITAL MANAGEMENT IN AUSTIN, TEXAS:

"There was a negative effect from currency translation in the quarter that was significant. Alcoa is not the same as other multinationals in that a lot of their production is sold in dollars, and a lot of their costs are not in dollars."

"This is a company in transition. They completed the sale of their packaging unit, they bought in some of their own stock, they kept the balance sheet reasonably strong. They will benefit from higher aluminum prices in the second quarter."

"There are things to look forward to. The share count is down, the balance sheet is fine, we've got a simpler company than we had a year ago, and we have new management coming in. And we've got higher prices that they will benefit from in the next few months."

BRIAN HICKS, CO-MANAGER, U.S. GLOBAL RESOURCES FUND

"We weren't expecting a whole lot. Our view is that we are still optimistic about aluminum and constructive on Alcoa. It looks like there is international demand for aluminum that is picking up, and China looks to be cutting back on production. We think that aluminum prices there seems to be more room to go on the upside."

"I think the fundamentals for aluminum could be quite strong over the next couple of years. That's the way we're looking at it -- we're not so focused on near-term quarterly results. I think the Street might allow for this mishap."

PETER SCHIFF, PRESIDENT OF EURO PACIFIC CAPITAL

"I think this is more of an indication that inflation is a bigger problem than people understand. It's driving costs higher, and even companies that you would think would benefit from it are having trouble because the cost pressures are very strong. But ultimately you're going to get big increases out of Alcoa in their prices as well."

BRUCE ZARO, CHIEF TECHNICAL STRATEGIST, DELTA GLOBAL ADVISORS, BOSTON: