Alcoa has blamed a number of problems

The US giant said it expects third quarter earnings to now fall short of forecasts due to a strike, a fire and restructuring costs.

Alcoa also blamed a downturn in trade from automotive, packaging and European markets; and overall higher costs.

The profits warning prompted Morgan Stanley to downgrade Alcoa's stock.

'Enhancing competitiveness'

Shares of Alcoa were down $2.83, or 8.5%, to $30.46 in afternoon trading on the Dow Jones in New York.

The company now expects to see seven to nine cents a share deducted from its earnings by the ongoing strike at its Becancour smelter in Quebec, a fire at a Pennsylvania packaging plant and the cost of closing two other facilities in Washington and Ohio.

"While we are not pleased with the short-term impact the labour issues have had on our bottom line, our actions are aimed at enhanced global competitiveness of our North American operations," said the company's chief executive, Alain Belda.