Alcoa falls short of Wall Street expectations

The Brazilian drought, which led to an extreme water shortage throughout the South American nation, hindered production of bauxite, an aluminium ore generally covered in multiple layers of rock and clay that require a crushing or washing plant for processing, as well as affecting profits from its hydropower system in the country.

"We have lower-than-expected global alumina segments due to weather delays and difficulties with shipload," chief executive Roy Harvey said.

The company reported a 25.1% rise in revenues to $3.17bn for the three months ended 31 December alongside earnings per share of $1.04, yet it fell short of Wall Street estimates of $1.22 per share on revenue of $3.29bn.

Alcoa's net loss ballooned to $196m from the $125m posted twelve months earlier, due in part to a one-off $22m charge linked to Washington's December tax reforms.

Nonetheless, management did not anticipate the tax law changes would have a material impact on its 2018 results.

The Manhattan-based firm forecast a non-operating income expense of roughly $20m for the first quarter of the current trading year associated with its efforts to lower its net pension plan and other post-employment benefits liabilities by $35m.

Alcoa planned to halt salaried defined benefit pension plans for its US and Canadian employees from 1 January 2021, affecting more than 800 employees.

As of 0840 GMT, shares had edged up 1.33% to $56.99 each after losing as much as 6.65% in after-hours trading.