Alcoa yesterday reported the strongest first quarter in the company's history, citing higher aluminum prices and robust demand from customers in the aerospace, construction and other markets.

Net income totalled $662 million, or 75 cents per diluted share vs. earnings of $608 million, or 69 cents per diluted share, in the year-ago quarter. Sales increased 11 percent to $7.9 billion. Alcoa said average aluminum prices rose 5 percent from the fourth quarter and were 15 percent above year-ago levels. Production was 4 percent higher from the year-ago quarter.

Income from continuing operations, including restructuring charges, totalled 77 cents per share, beating Wall Street forecasts by 2 cents per share.

"We have delivered a strong quarter while also investing in projects that will generate strong returns for years to come," said Chairman and Chief Executive Officer Alain Belda.

One of those projects is a smelter in Fjardaal, Iceland, where the company yesterday turned on electricity to the smelting pots that will produce aluminum. Mr. Belda said the plant would begin to contribute to results later this year.

During a call with Wall Street analysts, Mr. Belda said aerospace, which accounts for about 10 percent of revenue "continues to be a strong market for us."

He estimated Chinese aluminum production will increase 23 percent this year, matched by a comparable increase in consumption. Worries about stronger than forecast Chinese production recently prompted Prudential Equity Group to lower their rating for Alcoa and Canadian producer Alcan.

"Markets in general remain robust. Europe is stronger than the United States," Mr. Belda said.

The results were announced after the market closed. Alcoa shares finished at $34.90, up 3 cents. Over the last 52 weeks, they have traded between $26.39 and $36.96.