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[April 2008]
Alcoa First Quarter Results
Alcoa (New York, USA) has announced first quarter 2008 income from continuing operations of US$303 million versus US$624 million in Q4 2007. Excluding restructuring and tax impacts, income from continuing operations was US$361 million, up 20% on a comparable basis from the prior quarter, which included a favourable restructuring adjustment and tax benefits totalling US$323 million. First quarter 2007 income from continuing operations excluding restructuring and tax impacts was US$691 million.
Three of four business segments achieved significant after-tax operating income (ATOI) increases from Q4 2007, with segment ATOI up 42% excluding packaging. Earnings for the first quarter were compressed by higher input and energy costs and the impact of a weaker US dollar. Currency negatively impacted results by US$68 million on a sequential basis as the dollar deteriorated against most major currencies.
Revenues for the 2008 first quarter were US$7.4 billion, flat from the previous quarter, but a six percent increase excluding the revenue of the packaging and consumer business, which was sold in February 2008. Fourth quarter 2007 revenues were $7.4 billion, and revenues were $7.9 billion in the first quarter of 2007.
“We have generated strong returns in the face of challenging economic conditions and three of our segments – primary, flat-rolled and engineered products and solutions – achieved substantial ATOI growth,” said Alain Belda, Alcoa Chairman and CEO. “Upstream margins were squeezed by higher energy costs and a weaker U.S. dollar, but the global market remains tight and prices are near historic highs, primarily driven by demand in Asia, especially China.
“Our engineered products and solutions business delivered its strongest quarter ever, driven by robust aerospace and industrial gas turbine sales and productivity improvements. Market fundamentals remain strong and we are well positioned to boost returns when the North American and European economies rebound.”
Cost of goods sold as a percent of revenues was 79.9 percent, a 340 basis point improvement versus the fourth quarter of 2007.
The company funded numerous growth investments in the quarter including the new Juruti bauxite mine and Sao Luis refinery in Brazil; the strategic investment with Chinalco in Rio Tinto plc; and the acquisition of two aerospace fastening companies. In the quarter, capital expenditures were US$748 million, 60% of which was devoted to growth projects. In addition, the company repurchased approximately 14 million shares in the first quarter of 2008 under its approved share repurchase authorisation.
www.alcoa.com
ENDS