Summary
Howmet Aerospace Inc. (HWM), formerly Alcoa Inc. as of this filing, reported a net loss of $2.285 billion for the year ended December 31, 2013, a significant decrease from a net income of $191 million in 2012. This loss was primarily driven by a goodwill impairment of $1.731 billion in the Primary Metals segment, a discrete income tax charge related to valuation allowances on deferred tax assets, and charges related to the resolution of a major legal matter. Despite the net loss, the company highlighted progress in productivity improvements and cost management across its operations. Its midstream and downstream segments (Global Rolled Products and Engineered Products and Solutions) continued to grow revenue and generate profits, driven by innovation and market share gains. Management is focused on improving liquidity and strengthening the balance sheet by reducing debt and maintaining disciplined capital expenditures. The company projects continued growth in global aluminum demand for 2014, anticipating a balanced market, and is focused on achieving specific financial goals, including positive cash flow from operations exceeding capital spending and maintaining a healthy debt-to-capital ratio.
Financial Highlights
58 data points| Revenue | $23.03B |
| Cost of Revenue | $19.29B |
| Gross Profit | $3.75B |
| R&D Expenses | $192.00M |
| SG&A Expenses | $1.01B |
| Operating Expenses | $24.85B |
| Operating Income | -$2.29B |
| Interest Expense | $453.00M |
| Net Income | -$2.29B |
| EPS (Basic) | $-2.14 |
| EPS (Diluted) | $-2.14 |
| Shares Outstanding (Basic) | 1.07B |
| Shares Outstanding (Diluted) | 1.07B |
Key Highlights
- 1Reported a net loss of $2.285 billion for the year ended December 31, 2013, a substantial decline from a net income of $191 million in 2012, largely due to a significant goodwill impairment in the Primary Metals segment.
- 2Announced a $1.731 billion goodwill impairment charge primarily related to the Primary Metals segment, indicating a substantial decline in the carrying value of goodwill associated with this segment.
- 3Resolved significant legal matters with the Department of Justice and the Securities and Exchange Commission, including a plea agreement for violating the Foreign Corrupt Practices Act and a civil settlement, resulting in substantial fines and payments.
- 4Continued to focus on operational efficiency and cost reduction, with productivity improvements offsetting higher input costs in several segments.
- 5Invested in growth projects, including expansions in automotive sheet capacity and aluminum-lithium capabilities, and continued development of international ventures, notably the integrated aluminum complex in Saudi Arabia.
- 6Maintained a disciplined approach to capital expenditures, keeping them under $1.5 billion for the fourth consecutive year, and managed liquidity by maintaining over $1.4 billion in cash on hand.
- 7Addressed challenges in the Primary Metals segment by curtailing capacity and reviewing high-cost operations, reflecting a strategic response to weaker primary aluminum market conditions and pricing.