AA beats, nothing new.

Discussion in 'Stocks' started by S2007S, Apr 10, 2007.

  1. S2007S


    Alcoa Reports Strongest 1st Quarter Income in Company History
    Tuesday April 10, 4:12 pm ET
    -- Income from continuing operations of $673 million or $0.77 per share.
    -- Income from continuing operations excluding restructuring of $691 million or $0.79 per share.
    -- Revenues up 11 percent from a year ago to $7.9 billion.
    -- Highest 1st quarter cash flow in Company history and a more than $700 million improvement from year-ago quarter.
    -- Debt-to-capital ratio within target range at 30.9 percent while continuing significant investment in strategic growth projects.
    -- ROC including major growth investments of 12.7 percent; excluding growth investments, ROC was 15.6 percent.
    -- Downstream businesses deliver strong results.
    -- First electricity flows to new Alcoa Fjardaal smelter in Iceland today.

    NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE:AA - News) today announced first quarter 2007 income from continuing operations of $673 million, or $0.77 per diluted share. Excluding previously announced restructuring charges, income from continuing operations was $691 million, or $0.79 per share, a 13 percent increase from the first quarter of 2006, and a 20 percent increase from the fourth quarter of 2006 which also included discrete tax items.

    Net income for the quarter was $662 million, or $0.75, a nine percent increase from the first quarter of 2006. Net income for the fourth quarter 2006 was $359 million, or $0.41.

    Revenues for the quarter increased 11 percent from a year ago to $7.9 billion, driven by higher metal prices and sales to the aerospace, building and construction, and industrial product markets. Fourth quarter 2006 revenues were $7.8 billion.

    Cash from operations in the first quarter rose to a record $527 million, a more than $700 million improvement from the first quarter of 2006.

    "Alcoans have delivered another strong quarter of top and bottom line growth, productivity improvements in cost of goods and overhead, and a dramatic improvement in cash flow from last year's first quarter," said Alain Belda, Alcoa Chairman and CEO. "Our focus on higher value-added solutions, such as aerospace products, and productivity programs helped to continue our momentum this quarter.

    "The momentum we built last year is carrying through in disciplined capital and portfolio management, growth projects coming on-stream, and continued improvement in our strong downstream operations," said Belda. "Again, we have delivered a strong quarter while also investing in projects that will generate strong returns for years to come."

    Cost of goods sold as a percent of revenues was 76 percent, a 220 basis point improvement versus the fourth quarter of 2006 as a result of productivity initiatives.

    Balance Sheet and Growth Projects

    The Company's strong cash generation performance in the quarter of $527 million helped to continue to fund its growth programs. In the quarter, capital expenditures were $783 million, 67 percent of which was devoted to growth projects.

    "I am pleased our new Alcoa Fjardaal smelter in Iceland is moving from the construction phase to start-up and operational activities," said Belda. "This state-of-the-art facility and other growth projects will begin to contribute this year."

    The first electricity energizing pots for start-up of Alcoa Fjardaal began today in Iceland. Also, the Company's Intalco smelter in Ferndale, WA expanded its production this quarter.

    The Company's debt-to-capital ratio stood at 30.9 percent at the end of the quarter, within the Company's target range. The Company's 12-month trailing ROC stood at 12.7 percent at the end of the first quarter 2007, following significant growth investments. Excluding investments in growth, the Company's ROC was 15.6 percent.

    Segment and Other Results


    After-tax operating income (ATOI) was $260 million, flat compared to the prior quarter and up $18 million or 7% to the year-ago quarter. Sequentially, the higher price impact was completely offset by lower shipments, the impact of the Guinea strike and a stronger Australian dollar. Production was down 4%, or 135,000 metric tons, sequentially due primarily to a shorter quarter in terms of production days, the ramp-down of Point Comfort and the residual impact of the 4th quarter Pinjarra power outage.

    Primary Metals

    ATOI was $504 million, up $24 million, or 5%, compared to the prior quarter and up $59 million, or 13%, to the year-ago quarter. Sequentially, the ATOI increase was due to higher LME prices partially offset by Iceland start-up costs, Intalco restart costs, higher carbon costs and unfavorable currency. Third party realized price increased $136 per metric ton to $2,902 per metric ton. Primary metal production for the quarter decreased 9 kmt. The Company purchased approximately 46 kmt of primary metal for internal use as part of its strategy to sell value-added products.

    Flat Rolled Products

    ATOI was $62 million, flat with the prior quarter and down $4 million from the year-ago quarter. Increased productivity and higher sales volumes were offset by the elimination of the 4th quarter tax benefit.

    Extruded and End Products

    ATOI was $34 million, up $7 million from the prior quarter and $34 million from the year-ago quarter. Sequentially, the impact of higher volumes in the building and construction and aerospace markets more than offset declining volumes in the commercial transportation market. In addition, the improvement was driven by the ceasing of depreciation on assets held for sale.

    Engineered Solutions

    ATOI was $93 million, a 27% increase from the prior quarter and a 12% increase over the year-ago quarter. The record result was achieved despite the known decline in the commercial vehicle market and continued weakness in the U.S. automotive base. In addition, there was a positive tax item in the 4th quarter that did not repeat. Major drivers contributing to the quarter were higher aerospace sales and continued productivity improvements.

    Packaging and Consumer

    ATOI was $19 million, down $7 million from the prior quarter and up $11 million over the year-ago quarter. The sequential quarter decrease was driven by the normal seasonal demand in Consumer Products. The year over year improvement of 138% was driven by productivity improvements, largely due to restructurings hitting the bottom line.

    Alcoa will hold its quarterly conference call at 5:00 PM Eastern time on April 10th to present the quarter's results. The meeting will be webcast via alcoa.com. Call information and related details are available at www.alcoa.com under "Invest."

    Alcoa is the world's leading producer and manager of primary aluminum, fabricated aluminum and alumina facilities, and is active in all major aspects of the industry. Alcoa serves the aerospace, automotive, packaging, building and construction, commercial transportation and industrial markets, bringing design, engineering, production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components, Alcoa also markets consumer brands including Reynolds Wrap® foils and plastic wraps, Alcoa® wheels, and Baco® household wraps. Among its other businesses are closures, fastening systems, precision castings, and electrical distribution systems for cars and trucks. The company has 122,000 employees in 44 countries and has been named one of the top most sustainable corporations in the world at the World Economic Forum in Davos, Switzerland. More information can be found at www.alcoa.com

    Forward Looking Statement

    Certain statements in this release relate to future events and expectations and as such constitute forward-looking statements involving known and unknown risks and uncertainties that may cause actual results, performance or achievements of Alcoa to be different from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include: (a) material adverse changes in economic or aluminum industry conditions generally, including global supply and demand conditions and fluctuations in London Metal Exchange-based prices for primary aluminum and other products; (b) material adverse changes in the markets served by Alcoa, including the transportation, building and construction, distribution, packaging, industrial gas turbine and other markets; (c) significant increases in energy costs or interruption of energy supplies; (d) Alcoa's inability to mitigate the effects of increases in the costs of raw materials (including caustic soda, calcined petroleum coke and resins), in addition to energy, through price increases, productivity improvements or cost reduction programs; (e) Alcoa's inability to implement successfully its strategy for growth, to complete expansion projects as planned, or to realize the returns anticipated by management from such activities; (f) unfavorable changes in laws, governmental regulations or policies, foreign currency exchange rates or competitive factors in the countries in which Alcoa operates; (g) significant legal proceedings or investigations adverse to Alcoa, including environmental, product liability, safety and health and other claims; and (h) the other risk factors summarized in Alcoa's Form 10-K for the year ended December 31, 2006 and other reports filed with the Securities and Exchange Commission.
  2. At least they didn't sell the news...
  3. that bs. aa had awful earnings. after they blew out huge last qtr est's have actually fallen and they still barely beat with a disgraceful 1% revenue growth
  4. Why can't they make standards less gray?
    To my understanding, estimates are based on diluted share, whereby the estimate was decreased to .75c/share.
    The actual diluted eps was .75c/share.

    According to yahoo, cons est was...
    .78 30 days ago
    .77 7 days ago
    .75 today
    seems convenient to converge to the actual EPS right before the report. Also, all the headlines are jumping on .79 with one time restructuring beating .77 est.

    When are they going to get their act together and clean up accounting standards, so everyone is on the same objective page?
  5. Don't fight the tape. :D
  6. interestingly enough the Dow futures are flat. I guess it wasnt' a huge deal.
  7. Alcoa is so old sounding. Something that your daddy would have invested in.
  8. Earnings across the board are expected to be weak but still meeting if only beating by small %. Unless this earning season brings suprises to the shortfall, or horriable guidence. The market will stay in this new range.

    right now, it IS THE ECONOMY STUPID and Earnings will have little effect on the markets unless the X factors (above) come into play.

  9. Aluminum glut is building and copper is overpriced given new supply coming on line.

    Wait for pullbacks.
  10. #10     Apr 11, 2007