updated 4/11/2006 10:25:41 AM ET 2006-04-11T14:25:41

Shares of Alcoa Inc. surged Tuesday after the company reported its profit more than doubled in the first quarter, fueled by hefty metal prices and robust demand from manufacturers.

After the stock market closed Monday, the world’s biggest aluminum producer reported first-quarter earnings of $608 million, or 69 cents per share — 18 cents above Wall Street estimates. Pittsburgh-based Alcoa is traditionally the first of the Dow Jones’ component companies to report each quarter.

“With ongoing structural deficits for several years, there’s no reason to believe the price [of aluminum] is going down anytime soon,” said analyst Victor Lazarovici of BMO Nesbitt Burns.

Alcoa earned $260 million, or 30 cents per share, during the same period a year ago. The results included a loss of a penny per share from discontinued operations.

Quarterly sales climbed 16 percent from last year’s $6.2 billion to $7.2 billion.

Analysts had forecast revenues of $7.2 billion, but underestimated earnings at just 51 cents a share, in a poll by Thomson Financial.

The results include stock option expenses of $20 million, or 2 cents a share.

“It was a great quarter by any measure,” Chairman and Chief Executive Alain Belda told analysts on a conference call. “We did not have significant one-time effects as we did throughout the year last year and mainly in the fourth quarter.”

Alcoa was plagued in 2005 by higher-than-expected energy costs and other unforeseen developments, including lowered production at refineries in Jamaica and Texas because of the Gulf Coast hurricanes, an unplanned outage in an Australian smelting plant, strikes at its Spanish operations and restructuring costs.

But on Monday, company officials had no such weak news.

“Our upstream alumina and primary metals businesses, as well as our downstream engineered solutions — led by truck wheels, investment castings, forged products and fasteners — all turned in record performances this quarter,” Belda said. “Our aerospace and commercial transportation markets are particularly robust this year, and we expect overall market conditions to remain strong.”

Lazarovici said the current aluminum market points to future healthy quarters.

“I think at long last they’ve got enough price appreciation to offset the pricing they’ve been struggling with,” Lazarovici said. “I don’t see any reason they shouldn’t be able to sustain or do better for subsequent quarters.”

Lazarovici said Alcoa’s performance in engineered products, particularly for the automotive and aerospace industries, was so strong that it likely will offset much of any dip the company could see due to major cutbacks by Ford Motor Co. and General Motors Corp.

The earnings report came after Alcoa earlier Monday announced a joint venture with a Chinese firm to make aluminum brazing sheet near Shanghai.

Alcoa is spending more than $95 million for a 70 percent stake in the company, with the rest controlled by Shanxi Yuncheng Engraving Group. Alcoa will supply 50,000 metric tons of the rolled metal sheet from the plant, mostly to Asian auto makers.

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