(Reuters) - Shares of Alcoa Inc (AA.N) dropped 3 percent on Wednesday after the biggest U.S. aluminum producer posted lower-than-expected quarterly earnings and warned of weak economic conditions, particularly in Europe.
Analyst Tony Rizzuto of Dahlman Rose & Co cut Alcoa’s 2011 earnings estimate to 84 cents per share from 92 cents per share, but maintained his full year 2012 estimate of $1.15 per share and its “buy” rating, and $17.50 share price target.
Analysts on average currently expect Alcoa to earn $1.00 per share for the full year 2011, according to Thomson Reuters I/B/E/S.
Rizzuto said although third-quarter results fell below consensus estimates, Alcoa’s segment performance was in line with what he expected. The majority of the variance from his estimate was due to currency translation caused by a stronger U.S. dollar and higher-than-expected corporate expenses.
On Tuesday, Alcoa said an economic slowdown hurt demand and knocked aluminum prices lower, denting its third-quarter profit and sending its shares down almost 5 percent in after-hours trading.
On Wednesday, Alcoa stock was down 3 percent at $9.99 in morning trading on the New York Stock Exchange.
Reporting by Steve James, editing by Dave Zimmerman