Jan 10 2006
Alcoa has announced that its 2005 income from continuing operations was $1.23 billion, or $1.40 per diluted share, as the company took action to partially mitigate $878 million in impacts from raw materials, energy, and other cost inflation.
For the fourth quarter, income from continuing operations was $210 million, or $0.24. Profitability was eroded by negative impacts totaling $93 million, or $0.11, including: lowered production at refineries in Jamaica and Texas due to the Gulf Coast hurricanes; an unplanned outage at the Portland, Australia smelter; the impact of strikes on operations at Spanish plants; restructuring costs for plant closings and layoffs; mark-to-market losses on metal and metal-related activities; and integration costs for the newly acquired facilities in Russia; partially offset by a favorable legal settlement for power costs. Income from continuing operations was $0.33 in the third quarter of 2005, and $0.39 in the fourth quarter of 2004.
"Entering 2005, we anticipated significant pressures from rising input, energy costs and other cost inflation, but actual increases were even higher, nearly $900 million for the year," said Alain Belda, Alcoa Chairman and CEO.
"To meet that challenge, we took aggressive action, passing through significant price increases to downstream customers, improving our mix of value-added products, continuing productivity gains, and lowering taxes. That management action helped offset cost pressures and drove the top-line to the highest level in Alcoa's 117-year history," said Belda. "In the year ahead, we don't foresee the same sharp spikes on input prices, and our initiatives will gain further momentum to offset inflation and improve the bottom line.
"As we enter 2006, the vast majority of our primary metal production will benefit from the highest metal prices in more than 15 years," Belda added. "And we are working to secure future growth in attractive markets with customers around the world."
Net income in the quarter was $224 million, or $0.26, compared to $289 million, or $0.33, in the previous quarter, and $268 million, or $0.30, in the fourth quarter of 2004.
Annual revenues climbed 13 percent to $26.2 billion, the highest in the company's history. Revenues for the fourth quarter rose approximately 12 percent compared to the fourth quarter of 2004, driven by higher metal prices and strength in the aerospace market.
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