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 ALCOA says it will stop all "non-critical" capital projects and suspend its share-buyback program after a slump in metal prices.
The company posted a third-quarter net income dropped 52 per cent, hurt by a charge for layoffs at a Texas aluminium smelter.
"Given the sharp decline in metal prices and increasingly soft demand in our key markets, we are stopping all non-critical capital projects, making targeted reductions to match market conditions and are adjusting our manufacturing capacity to meet demand in rapidly changing upstream and downstream markets," chief executive Klaus Kleinfeld said.
The largest US aluminium producer reported net income of $US268 million ($380 million), or US33 cents a share, down from $US555 million, or US63c a share, a year ago.
The latest results included a US4c charge, which Alcoa disclosed last month. The company said it would lay off about 660 people by the end of the year at its Rockdale, Texas operations - essentially closing operations there - due to power-supply problems and decreasing demand for aluminium. The company said today it was halting production at the site.
Year-ago results included a gain of US25c related to the sale of the company's stake in Aluminium Corporation of China.
Revenue fell 2.1 per cent to $US7.23 billion.
Analysts polled by Thomson Reuters were expecting per-share earnings of US50c on revenue of $US7.23 billion. Estimates excluded some items.
In the quarter, the company shipped 1.34 million tonnes of aluminium products, up 1.1 per cent, while its average realised price per tonne of aluminium rose 7.7 per cent to $US2945.
Aluminium prices have fallen in recent months as China, India and other emerging markets have reduced consumption.
Alcoa also has been struggling with soaring costs for energy - which accounts for nearly 30 per cent of production costs at aluminium producers - and other raw materials as well as increased competition and lower demand in its key North American and European markets.
Downturns in the US housing and automotive markets have hurt two of the biggest sectors for metal, and Alcoa has made efforts to reduce production and power costs to remain competitive against bigger rivals Rio Tinto and United Co. Rusal.
Last week, Goldman Sachs predicted slower demand for metals, with prices possibly falling to about 75 per cent of cash costs - the lowest level in 10 years. The firm lowered its investment rating on Alcoa's stock to neutral from buy as a result.
In July, Alcoa trimmed its forecast for 2008 growth in worldwide aluminium consumption to 7.9 per cent from 8.5 per cent. It called global aluminium markets "robust" overall but described North American markets as declining and some European markets as "sluggish".
Alcoa was halted after hours in New York at $US16.71 after closing down 7.7 per cent for the session amid a drop in the broader market. It was recently trading at $US15.12.
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