Falling aluminum hits Amax income

A 40% drop in the price of primary aluminum from early 1989 levels was responsible for a decrease in the first-quarter income reported by New York-based Amax (TSE), according to Chairman Allen Born. Amax reported first-quarter net earnings of $50 million or 57 cents per share, down from $114 million or $1.34 per share in the first three months of 1989. First-quarter revenues also decreased slightly to $928 million from $980 million in the equivalent 1989 quarter.

“A softening of the economy that began in the third quarter of 1989 reduced demand and prices for aluminum ingot and some aluminum products compared with prices in the first half of 1989,” said Born.

“Prices for primary aluminum, for example, during the first quarter of 1990 were approximately 40% lower than they were at the beginning of 1989,” he said.

However, Amax’s coal producing affiliate contributed $29 million in operating earnings during the first quarter compared with $20 million a year ago while oil and gas earnings increased 20% to $6 million. The $14 million in operating earnings contributed by Amax’s 87% owned subsidiary Amax Gold (TSE) in the first quarter was a $1-million improvement over a year ago.