Summary
Howmet Aerospace Inc. (HWM), formerly Alcoa Inc., reported its third quarter and nine-month results for the period ending September 30, 2009. The company experienced a significant decline in sales and profitability compared to the prior year, reflecting the challenging global economic environment. Sales for the third quarter dropped by 34% year-over-year, and the company reported a net loss for the nine-month period. Cost of goods sold as a percentage of sales increased, indicating pressure on margins. However, the company implemented several cost-saving measures, including workforce reductions and procurement efficiencies, which helped to partially offset the decline in revenue. Alcoa also strengthened its financial position through strategic actions such as reducing its dividend and issuing new common stock and convertible notes. The company continues to manage its operations and financial resources prudently in the prevailing economic climate.
Financial Highlights
53 data points| Revenue | $4.62B |
| Cost of Revenue | $3.89B |
| Gross Profit | $727.00M |
| R&D Expenses | $39.00M |
| SG&A Expenses | $234.00M |
| Operating Income | $719.00M |
| Interest Expense | $120.00M |
| Net Income | $77.00M |
| EPS (Basic) | $0.08 |
| EPS (Diluted) | $0.08 |
| Shares Outstanding (Diluted) | 978.00M |
Key Highlights
- 1Net sales for the third quarter of 2009 decreased by 34% to $4.615 billion, compared to $6.970 billion in the same period of 2008.
- 2Net income attributable to Alcoa for the third quarter of 2009 was $77 million, or $0.08 per diluted share, a significant decrease from $268 million, or $0.33 per diluted share, in the third quarter of 2008.
- 3The company reported a net loss of $874 million, or ($0.95) per diluted share, for the nine months ended September 30, 2009, compared to a net income of $1,117 million, or $1.35 per diluted share, for the same period in 2008.
- 4Cost of goods sold as a percentage of sales increased to 84.2% in Q3 2009 from 81.0% in Q3 2008, reflecting margin pressures.
- 5Alcoa implemented cost reduction initiatives, including procurement efficiencies and overhead rationalization, leading to a decrease in Selling, General, and Administrative (SG&A) expenses.
- 6The company reduced its quarterly common stock dividend from $0.17 per share to $0.03 per share to improve liquidity.
- 7Significant restructuring and other charges were recorded, particularly in the nine-month period, related to employee layoffs and adjustments for businesses held for sale.