Washington (Platts)--3Mar2011/547 pm EST/2247 GMT

US aluminum sheet maker and recycler Aleris Thursday posted fourth-quarter net income of $42 million, compared with a net loss of $759 million for Q4 2009.

Q4 net earnings would have been $48 million and $34 million in 2010 and 2009, respectively, excluding the tax impacts of metal price lag, reorganization items, unrealized hedging gains, the impact of recording assets at fair value through fresh-start accounting, restructuring and impairment charges and interest expense associated with previous debt structure. the company said.

Fourth-quarter volume rose 17% from a year before, Aleris said, adding that the increase, coupled with higher LME prices and improved rolling margins, resulted in fourth-quarter revenue of $1.1 billion, 26% above the $840 million in Q4 2009.

For the full-year, revenue rose to $4.1 billion from $2.9 billion in Q4 2009.

Pounds invoiced totaled 1.13 million lb in Q4 2010, up from 974,000 lb a year before.

Aleris emerged from Chapter 11 bankruptcy protection on June 1, 2010. This resulted in the company being considered a new entity for financial reporting purposes. As a result, Aleris' financial statements for periods after June 1, 2010, are not comparable with financial statements for periods prior to that date.

Aleris' recycling and specification alloys Americas' segment income for the fourth quarter increased $15 million from $7 million in the year-ago quarter, thanks to a 23% increase in pounds invoiced, driven by improved demand across all of the industries served by this segment, particularly the automotive applications.

Rolled products North America's segment income for the fourth quarter decreased fell to $6 million from $16 million in Q4 2009. Its performance versus the prior-year fourth quarter was affected by customer restocking trends that benefited the fourth quarter of 2009 and slight customer destocking activities in the fourth quarter of 2010.

Higher unit conversion costs resulted from the sequential seasonal decline in volume in the fourth quarter after ramping up production at the Lewisport, Kentucky, operations and partially restarting the Richmond, Virginia, facility to meet higher demand in the first three quarters of 2010.

In addition, the rolled products segment usedlighter seasonal volumes to perform extended maintenance on its rolling mills and run additional trials of new alloys in its continuous cast rolling operations, the company said. Higher rolling margins were realized after a series of successful pricing initiatives in the preceding quarters, partially offsetting the volume and conversion cost impacts, Aleris added.

Europe's segment income for the fourth quarter of 2010 increased by $23 million to $36 million compared to the fourth quarter of 2009, thanks to a 16% increase in shipment levels as demand from the automotive, aerospace and most other industries served by this segment continued to outpace the prior year.

Contribution margins were positively impacted by improved pricing and metal spreads. Productivity initiatives across the segment also contributed to the improved performance with productivity gains more than offsetting inflation and higher seasonal repair and maintenance spending.

Steven Demetriou, Aleris chairman and CEO, said in a statement that the company's "fourth-quarter results demonstrate the benefits associated with our successful restructuring initiatives and the continued momentum of the economic recovery."

"This is particularly true in our European rolled products and extrusions businesses, as well as our recycling and specification alloys businesses in both the Americas and Europe, where higher volumes and improved pricing led to significant performance improvements. We ended 2010 well positioned to capitalize on our strategic growth initiatives led by our announced expansions in China, as well as expected continued benefits from the recovery."