Summary
Howmet Aerospace Inc. (HWM), reporting as Alcoa Inc. for this filing, experienced a significant downturn in its second quarter and first half of 2009 compared to the prior year. The company reported a net loss of $454 million for the second quarter, a stark contrast to the $546 million net income in the same period of 2008. This decline was driven by substantially lower realized prices for aluminum and alumina, coupled with decreased sales volumes in downstream segments, reflecting the severe global economic recession. The company also incurred significant restructuring and other charges, totaling $82 million in the quarter, primarily related to employee layoffs and business adjustments. Despite the challenging operating environment, Alcoa took decisive actions to improve its financial position. These included reducing its common stock dividend, issuing new shares and convertible notes to bolster liquidity, and curtailing production to align with weaker demand. The balance sheet shows a slight decrease in total assets but an increase in cash and cash equivalents, suggesting some success in managing working capital. However, long-term debt increased, reflecting financing activities undertaken to maintain liquidity.
Financial Highlights
55 data points| Revenue | $4.24B |
| Cost of Revenue | $3.97B |
| Gross Profit | $278.00M |
| R&D Expenses | $38.00M |
| SG&A Expenses | $240.00M |
| Operating Income | -$792.00M |
| Interest Expense | $115.00M |
| Net Income | -$454.00M |
| EPS (Basic) | $-0.47 |
| EPS (Diluted) | $-0.47 |
| Shares Outstanding (Basic) | 974.00M |
| Shares Outstanding (Diluted) | 974.00M |
Key Highlights
- 1Significant net loss of $454 million in Q2 2009, compared to a net income of $546 million in Q2 2008.
- 2Sales decreased by 41% to $4.24 billion in Q2 2009 from $7.25 billion in Q2 2008, primarily due to lower aluminum and alumina prices and reduced volumes.
- 3Restructuring and other charges totaled $82 million in Q2 2009, mainly for workforce reductions and business adjustments.
- 4The company reduced its quarterly common stock dividend from $0.17 to $0.03 per share to preserve liquidity.
- 5Alcoa issued new common stock and convertible notes, raising $1.438 billion in net proceeds to strengthen its financial position.
- 6Cash provided from operations significantly decreased to $57 million for the first six months of 2009 from $719 million in the same period of 2008.
- 7Long-term debt increased, with significant additions from convertible notes and other borrowings, while commercial paper outstanding decreased substantially.