Alcan reports lower earnings

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Alcan Inc., the world's second-biggest aluminum producer, reported a substantially smaller second-quarter profit than analysts expected and warned that the hard times will last for at least three months.

Shares of the Canadian company fell 10.6 percent to close at $39.11 as investors reacted to the news and Merrill Lynch and Co. replaced a "buy" recommendation on the stock with a "neutral" rating.

Operating profit for the quarter was $105 million, or 33 cents per share, down from $144 million, or 66 cents, a year earlier.

Analysts had expected a profit of 57 cents per share.

Daniel Roling, an analyst at Merrill Lynch, called the result "extremely disappointing," saying it will be hard for the company to make up the profit shortfall over the course of the year.

The net profit was $74 million, or 23 cents per share, down from $153 million, or 70 cents per share, a year earlier. Sales rose to $3.17 billion from $2.06 billion in the second quarter of 2000.

Kaiser Aluminum Corp. will announce its earnings next Tuesday.