updated 4/7/2009 6:28:00 PM ET 2009-04-07T22:28:00

Alcoa Inc., the largest U.S. aluminum producer, said Tuesday it lost $497 million during the first quarter, as the global economic crisis continued to erode prices and demand for the lightweight metal.

The loss was Alcoa's second in the past two consecutive quarters and underscored the deterioration of aluminum-intensive industries such as autos and construction. Orders for the metal, used in everything from cars and airplanes to windows and soda cans, began sliding last fall as the world economy weakened. Stockpiles grew, prices plunged and aluminum makers started scaling back production worldwide. Analysts say plants are losing money, but that prices may recover modestly this summer.

Alcoa, the first blue chip company to report earnings for the quarter, and considered an indicator of upcoming results from other firms, said its quarterly revenue dropped 44 percent to $4.15 billion from $7.38 billion during the same period last year.

In response to the tough market conditions, Pittsburgh-based Alcoa has taken measures to bolster its balance sheet and lower costs in recent months.

Days before reporting its first quarterly loss in six years in January, Alcoa announced plans to shed 13 percent of its global work force, sell four business units and substantially reduce production.

Alcoa took further steps in March, when the aluminum maker — the world's third-largest — cut its dividend for the first time in more than two decades, unveiled plans to sell stock and debt, and pledged to slash costs by more than $2.4 billion annually.

Alcoa, which makes aluminum and uses it to manufacture products such as truck wheels and fighter jet parts, announced the latest of several production cuts last week, saying it would reduce output at a smelter in New York. That move would bring total cuts to about 20 percent of annual output, Alcoa said.

"While our financial performance in the quarter was adversely affected by the economy-driven drop in demand, we launched operational and financial measures that will significantly improve our profitability and cash flow in 2009 and beyond," Alcoa's president and chief executive, Klaus Kleinfeld, said in a statement.

Kleinfeld said he expects economic stimulus programs focusing on infrastructure and energy efficiency to create near-term demand for aluminum, and that global trends such as population growth and urbanization will drive demand in the long term.

Prices of aluminum have plummeted to about 69 cents per pound from around $1.50 per pound last summer. During the quarter, prices on the London Metals Exchange averaged about 62 cents per pound, down 25 percent from the previous quarter.

Some analysts point to excess supplies of aluminum worldwide and say further production cuts are needed to match falling orders. China has driven much of the global demand for aluminum in recent years.

Alcoa lost 61 cents per share in the quarter ended March 31. During the same period a year earlier, the company earned $303 million, or 37 cents per share.

Excluding one-time items totaling $17 million, or 2 cents per share, Alcoa's loss would have been 59 cents per share.

Analysts polled by Thomson Reuters on average expected Alcoa to lose 56 cents per share on revenue of $4.08 billion during the quarter, according to a survey by Thomson Reuters. Wall Street typically excludes one-time charges in its earnings estimates.

Shares of Alcoa fell 7 cents to $7.72 in after-hours trading. During the regular session, the stock lost 12 cents to close at $7.79. During the quarter, Alcoa stock lost about 35 percent of its value, hitting its lowest level in more than 20 years.

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