Alcoa reported increased Q3 revenue compared to a year ago, but had lower profit due to reduced metal prices, seasonal factors and weakness in Europe.

Income from continuing operations was $172M in Q3 2011, compared to $61M in Q3 2010 and $326M in Q2 2011.

“Aluminum prices fell in the third quarter, but most markets continued to grow,” said Alcoa CEO Klaus Kleinfeld. “With the exception of Europe, we saw growth in our end markets, though at a slower rate than in the first half, as confidence in the global recovery faded.

The company forecast a growth rate of 12% for 2011, with a slower pace in the second half of the year. It still believes aluminium demand will double by 2020 and said it was a confident company in a nervous world.

Revenue was $6.4bn in Q3 2011, up 21% from the $5.3bn recorded in Q3 2010 and down 3% compared to $6.6bn recorded in Q2 2011.

On a year-over-year basis, Alcoa’s major end markets showed strong revenue growth, led by commercial transportation (up 44%), automotive (up 26%), packaging (up 21%), and aerospace (up 20%).

So far this year Alcoa has spent $165M on its Ma’aden joint venture in Saudi Arabia, 41% of target.

It said it continues to project aluminium demand will grow 12% in 2011 on top of the 13% growth in 2010, well ahead of the 6.5% compound annual growth rate needed to double demand by 2020. Increasing demand in China will mostly offset declines in Europe and other regions.

After-tax operating income ATOI in Q3 for its primary metals segment was $110M, an increase of $32M, or 41%, over Q3 2010 and a decrease of $91M, or 45%, from Q2 2011. Restarts at smelters in Massena, NY, and Intalco and Wenatchee, WA, all in the USA improved Q3 results by $6M compared to Q2 2011.