Alcan 2Q Net Falls On Weaker US Dollar; Sales Up 8.2%

Alcan, which earlier this month agreed to be acquired by Rio Tinto, posted a 3.7% decline in second-quarter net income as a weaker U.S. dollar affected its operating earnings. The Montreal aluminum firm reported net income of $438 million, or $1.18 a share, down from $455 million, or $1.21 a share, a year earlier.The negative effect of foreign currency translation widened to $193 million from $100 million in the year earlier period. Excluding foreign currency translation, operating earnings increased 8.5% to $603 million, or $1.62 a share, from $556 million, or $1.48 a share, a year earlier. Alcan said the increase was due in part to higher pricing and mix in its engineered products and bauxite and alumina units, partly offset by higher energy, raw materials and operating costs. Sales and operating revenue increased 8.2% to $6.61 billion from $6.1 billion. Analysts estimated earnings of $1.71 a share on revenue of $6.46 billion.Total aluminum volume remained flat year over year, at 1.1 kilotonnes. Looking ahead,world primary aluminum consumption in 2007 is estimated to rise by about 10.1%, boosted by exceptionally high demand in China.