Apr 7 2004
- Net income was $355 million, up 135% from first quarter of 2003.
- Income from continuing operations was $350 million, up 79% from 2003.
- $108 million in new annual savings toward third-straight $1 billion-plus cost challenge; 230 basis point decline in cost of goods to 77.9% of sales.
- Debt to capital ratio at 34.9%, within the company's targeted range.
- Five of six segments showed double-digit increases in profitability year over year; engineered products up 88% and flat rolled products up 25%.
- Substantial completion of divestiture program with sale of specialty chemicals and other businesses.
Alcoa today reported first quarter net income of $355 million, or $0.41 per diluted share, more than double the $151 million, or $0.17, in the first quarter of 2003, and up 22 percent from $291 million, or $0.33, in the previous quarter.
Income from continuing operations was $350 million, or $0.40, up 79 percent from the $195 million, or $0.23, in the first quarter of 2003, and higher than the $340 million, or $0.39, in the previous quarter. The previous quarter's results included $105 million in pre-tax gains from insurance settlements and a lower effective tax rate. The first quarter benefits from a $58 million after-tax gain on the sale of the chemicals business, half of which was offset by higher costs from a customer bankruptcy, litigation settlements, and restructuring. "In the quarter, our downstream aluminum businesses strengthened as end markets in Europe and the U.S. expanded," said Alain Belda, Chairman and CEO of Alcoa. "Demand for aluminum fabricated products was the highest in three years, driving prices higher. In a stronger market, we achieved earnings growth by keeping our focus on both growth and costs, laying the groundwork for further improvements in profitability." Market Overview
Revenue in the quarter was $5.7 billion, the highest in almost three years, and up 11 percent year over year and 3 percent on a sequential basis. Higher aluminum prices and stronger shipments of engineered and flat-rolled products offset the seasonal decline in consumer packaging and lower third-party alumina sales as more alumina was dedicated to internal demand. The strong fabricated aluminum shipments were driven by double-digit increases in sales to the commercial vehicle, automotive, and aerospace markets.
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