Alcoa Inc. (AA) swung to a first-quarter profit as the global economic recovery continued to help aluminum prices, and the company maintained its forecast for strong global demand for the metal this year.

Income from continuing operations reached its highest mark since the second quarter of 2008, and the bottom line topped analysts' expectations, although sales growth wasn't as strong as Wall Street had expected. Results a year ago were stung by restructuring and environmental costs and other impacts that totaled $295 million.

Alcoa and other metal producers have benefited from rising prices. Benchmark aluminum prices on the London Metal Exchange rose 14% from the end of the first quarter of 2010 through the end of March. They finished last month at $2,648 a metric ton amid stronger orders for automobiles, packaging, durable goods and aircraft.

Alcoa's average realized price for aluminum grew 15% while shipments inched up 0.4%.

Revenue climbed 22% to $5.96 billion. Alcoa said strong end market revenue growth was led by double-digit increases in packaging, automotive, commercial transportation and industrial products.

"The end markets are in good shape," Chairman and Chief Executive Klaus Kleinfeld said in a conference call accompanying the earnings results.

The growth in aluminum demand is mainly being driven by China, followed by other emerging markets, he said, reiterating the company's global aluminum demand growth projection of 12% for this year.

"They haven't wavered at all in what they expect the global aluminum market to do, which is not too shabby," said Morningstar analyst Bridget Freas. "That's a pretty good sign in terms of aluminum performance for the year."

Still, the company has warned of higher energy and raw material costs, although it also plans to focus on continued productivity improvements.

Alcoa, which unofficially kicks off the U.S. earnings season, posted a profit of $308 million, or 27 cents a share, compared with a prior-year loss of $201 million, or 20 cents a share. The latest results included a penny per-share charge related to restructuring and acquisition costs, while prior-year results included restructuring and other charges that totaled 29 cents a share.

This year, Alcoa completed its purchase of the aerospace fastener business of aircraft components producer and supplier TransDigm Group Inc. It paid $10 million for a 10% equity stake in electronics-waste recycler Electronic Recyclers International. It also finalized a deal with Norwegian company Orkla ASA to acquire full ownership of the technology associated with a new aluminum production process that is in the research and development phase.

Analysts polled by Thomson Reuters expected a profit of 27 cents a share on revenue of $6.07 billion.

Shares were recently down 3.3% at $17.18 in after-hours trading. The stock was up 15% this year through Monday's close.

-By Matt Whittaker, Dow Jones Newswires; 212-416-2139; matt.whittaker@dowjones.com

--John Kell contributed to this article.
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