The declines in profit were mostly blamed on, not surprisingly, higher costs that rising aluminum prices couldn't keep pace with. Despite increasing its shipping by 1.3% and increasing the average realized price per metric ton of aluminum by 6.2%, this wasn't enough to deal with soaring energy and raw material costs.

Other problems investors were aware of include more than enough supply of the metal to meet the lower demand in North America and Europe following the housing and auto markets' declines. In markets where demand grows for the metal, Alcoa faces tougher competition.

Alcoa shares soared as much as 6% initially in after-hours trading but have recently (5:42 p.m.) changed hands 3.2% higher at $33.36. It seems that more than anything, Alcoa's results helped calm a very jittery market, nervous about second-quarter earnings, which are expected to be 10% lower for the Dow Jones companies.

Going forward, though, Alcoa has plans to reduce costs by looking for cheaper sources of energy, which accounts for a third of the cost of producing the metal. Still, costs aren't expected to improve much in the next few quarters, and barring a change in aluminum pricing, demand or production, Alcoa will undoubtedly struggle with costs in the near future.