New York (Reuters) - Alcoa Inc reported a stronger-than-expected increase in third-quarter profit as higher aluminum prices and lower costs drove a recovery in its business unit that produces aluminum.

The aluminum company traditionally has been one of the first S&P 500 companies to report quarterly results, and some see it as a bellwether for the broader U.S. economy because it supplies major industries such as auto and airplane manufacturing.

In the third quarter, Alcoa's net income rose to US$149 million, or 12 cents a share, from US$24 million, or 2 cents, even as it took restructuring charges for smelter closures.

Alcoa's growing business making specialized goods for automotive and aerospace customers has helped offset a weak market for less-processed aluminum. The company has also been working to improve costs.

After a steep drop, aluminum prices surged 27 per cent in the seven months through August to a 18-month peak. They have since given up some gains but are up about 8 per cent on the year.