Alcoa Earnings Jump 19% from Year-Ago Quarter.PITTSBURGH--(BUSINESS WIRE)--Oct. 6, 1999-- Alcoa Alcoa U.S. company, the world's largest producer of aluminum. Established in Pittsburgh, Pa., in 1888, it adopted the name Aluminum Co. of America in 1907. Alcoa introduced aluminum foil in 1910 and found uses for aluminum in the emerging aviation and automobile industries. today reported net income of $259.1 million (71 cents per basic share) for the third quarter of 1999 compared with net income of $217.7 million (61 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. ) for the 1998 third quarter. For the 1999 nine-month period, net income was $720.2 million, or $1.96 per share, compared with $634.7 million, or $1.84 per share, for the comparable 1998 period. "I am pleased that this is Alcoa's fifth consecutive quarter of improved earnings," said Alain Alain: see Chartier, Émile Auguste. Belda, Alcoa CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. . "In particular, the rollout of the Alcoa Production System through our manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. worldwide is yielding significant cost savings." -0-
Third Quarter Nine Months
1999 1998 %Change 1999 1998 %Change
Revenues $4,052.3 $4,108.9 (1.4) $12,069.7 $11,141.0 8.3
Net Income 259.1 217.7 19.0 720.2 634.7 13.5
Earnings per
Share .71 .61 16.4 1.96 1.84 6.5
(in millions except per share amounts)
Revenues for the 1999 third quarter were $4.1 billion, level with $4.1 billion for the 1998 third quarter. Aluminum product shipments were 1,100,000 metric tons (Transparent Optical Networking Services) A marketing term for providing dark fiber to a customer. The customer is responsible for generating the transmission signal and interpreting it at the other end. See dark fiber. (mt) compared with 1,133,000 mt in the year-ago quarter. Revenues for the first nine months of 1999 were $12.1 billion compared with $11.1 billion for the first nine months of 1998, while shipments were 3,349,000 mt compared with 2,777,000 mt. Return on shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. for the 1999 nine-month period, annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. , was 15.7%, compared with 17.1% for the year-ago period. Alcoa also stated that, at the end of the 1999 third quarter, the company had achieved $636 million in annualized cost savings towards its $1.1 billion target. Announced in mid- mid- pref. Middle: midbrain. 1998, this aggressive target is to be achieved by January January: see month. 1, 2001. The quarterly run rate at the end of the 1999 third quarter was $159 million, compared with $130 million for the 1999 second quarter. Founded in 1888, Alcoa is the world's leading producer of aluminum and alumina alumina (əl  `mĭnə) or aluminum oxide, Al2O3, chemical compound with m.p. about 2,000°C; and sp. gr. about 4.0. and a major participant ParticipantA party of a funding. It usually refers to the lowest rank or smallest level of funding. in all segments of the industry: mining, refining refining, any of various processes for separating impurities from crude or semifinished materials. It includes the finer processes of metallurgy, the fractional distillation of petroleum into its commercial products, and the purifying of cane, beet, and maple sugar , smelting smelting, in metallurgy, any process of melting or fusion, especially to extract a metal from its ore. Smelting processes vary in detail depending on the nature of the ore and the metal involved, but they are typified in the use of the blast furnace. , fabricating and recycling recycling, the process of recovering and reusing waste products—from household use, manufacturing, agriculture, and business—and thereby reducing their burden on the environment. . Alcoa serves customers worldwide in the packaging, automotive, aerospace, construction and other markets with a great variety of fabricated fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: and finished products. The company has 215 operating locations in 31 countries. Financial and operating data for Alcoa and its subsidiaries follow. -0-
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
Third quarter
For the period ended September 30 1999 1998
Sales $ 4,052.3 $ 4,108.9
Other income 38.5 47.8
4,090.8 4,156.7
Cost of goods sold 3,119.7 3,235.7
Selling, general administrative
and other expenses 202.0 217.9
Research and development expenses 33.6 28.8
Provision for depreciation and depletion 223.8 233.2
Interest expense 51.1 59.0
3,630.2 3,774.6
Income from operations before
taxes on income 460.6 382.1
Provision for taxes on income 147.4 115.9
Income from operations 313.2 266.2
Less: Minority interests' share (54.1) (48.5)
NET INCOME $ 259.1 $ 217.7
Earnings per common share:
Basic $ 0.71 $ 0.61
Diluted $ 0.69 $ 0.61
Average number of shares used to compute:
Basic earnings per common share 366,604,552 357,349,780
Diluted earnings per common share 375,215,548 358,855,182
Translation and exchange adjustments included
in net income $ (1.3) $ 0.6
Shipments of aluminum
products (metric tons) 1,100,000 1,133,000
FINANCIAL REPORT
Alcoa and subsidiaries
(in millions except share and ton amounts)
(UNAUDITED)
Nine months
For the period ended September 30 1999 1998
Sales $ 12,069.7 $ 11,141.0
Other income 77.7 94.2
12,147.4 11,235.2
Cost of goods sold 9,387.7 8,670.6
Selling, general administrative
and other expenses 596.5 531.3
Research and development expenses 91.4 81.2
Provision for depreciation and depletion 663.2 604.1
Interest expense 153.2 140.0
10,892.0 10,027.2
Income from operations
before taxes on income 1,255.4 1,208.0
Provision for taxes on income 401.7 392.6
Income from operations 853.7 815.4
Less: Minority interests' share (133.5) (180.7)
Net Income $ 720.2 $ 634.7
Earnings per common share:
Basic $ 1.96 $ 1.84
Diluted $ 1.91 $ 1.83
Average number of shares used to compute:
Basic earnings per common share 366,891,578 343,771,272
Diluted earnings per common share 375,502,574 345,276,674
Shares outstanding at end of period 366,294,943 366,692,730
Translation and exchange
adjustments included in net income $ (11.1) $ (4.2)
Shipments of aluminum
products (metric tons) 3,349,000 2,777,000
Return on average shareholders' equity 15.7% 17.1%
Alcoa and subsidiaries
Condensed Consolidated Balance Sheet
(in millions)
(unaudited)
September 30 December 31
1999 1998
----------- -----------
ASSETS
Current assets:
Cash and cash equivalents (includes
cash of $69.9 in 1999
and $131.1 in 1998) $ 211.9 $ 342.2
Short-term investments 85.1 39.4
Receivables from customers, less
allowances: 1999-$62.6; 1998-$61.4 2,213.1 2,163.2
Other receivables 192.9 171.0
Inventories 1,583.5 1,880.5
Deferred income taxes 185.6 198.0
Prepaid expenses and other current assets 282.3 230.8
--------- ----------
Total current assets 4,754.4 5,025.1
--------- ----------
Properties, plants and equipment, at cost 18,136.2 18,224.5
Less, accumulated depreciation, depletion
and Amortization 9,157.7 9,091.0
--------- ----------
Net properties, plants and equipment 8,978.5 9,133.5
Goodwill, net of accumulated amortization
of $205.8 in 1999 and $179.3 in 1998 1,333.1 1,414.1
Other assets 1,798.5 1,889.8
--------- ---------
Total assets $16,864.5 $17,462.5
--------- ---------
LIABILITIES
Current liabilities:
Short-term borrowings $ 611.9 $ 431.0
Accounts payable, trade 1,167.2 1,044.3
Accrued compensation and retirement costs 559.9 553.2
Taxes, including taxes on income 276.1 431.3
Other current liabilities 512.4 627.4
Long-term debt due within one year 48.0 181.1
-------- ---------
Total current liabilities 3,175.5 3,268.3
-------- ---------
Long-term debt, less amount due within
one year 2,668.9 2,877.0
Accrued postretirement benefits 1,749.8 1,840.1
Other noncurrent liabilities and deferred
credits 1,488.0 1,587.1
Deferred income taxes 418.0 358.1
-------- ---------
Total liabilities 9,500.2 9,930.6
-------- ---------
MINORITY INTERESTS 1,409.0 1,476.0
-------- ---------
CONTINGENT LIABILITIES - -
SHAREHOLDERS' EQUITY
Preferred stock 55.8 55.8
Common stock 394.7 394.7
Additional capital 1,712.3 1,675.9
Retained earnings 5,727.9 5,305.1
Treasury stock, at cost (1,310.0) (1,028.7)
Accumulated other comprehensive loss (625.4) (346.9)
-------- ---------
Total shareholders' equity 5,955.3 6,055.9
-------- ---------
Total liabilities and
shareholders' equity $16,864.5 $17,462.5
--------- ---------
ALCOA 3rd QUARTER SUPPLEMENTAL INFORMATION
Consolidated Revenues 3Q98 4Q98 1Q99 2Q99 3Q99
Alumina and chemicals 398.4 452.7 420.3 455.8 473.9
Primary metals 596.0 629.8 533.7 518.6 559.9
Flat-rolled products 1,308.6 1,291.8 1,269.6 1,257.6 1,273.0
Engineered products 968.0 978.8 942.3 939.3 917.1
Other 832.3 839.4 812.8 861.1 828.4
---------------------------------------------
Total 4,103.3 4,192.5 3,978.7 4,032.4 4,052.3
Consolidated Shipments (KMT's)
Alumina and chemicals 1,536 1,783 1,664 1,836 1,814
Primary metals 390 441 370 354 335
Flat-rolled products 483 479 487 496 496
Engineered products 240 240 258 249 249
Other 20 14 17 18 20
--------------------------------------------
Total Aluminum 1,133 1,174 1,132 1,117 1,100
Average realized
price - Primary 0.67 0.64 0.63 0.64 0.71
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