Summary
Howmet Aerospace Inc. (HWM), operating as Alcoa Inc. in this filing, reported a significant turnaround in its financial performance for the nine months ended September 30, 2010, compared to the same period in 2009. While the prior year saw a substantial net loss of $874 million, the company achieved a net income of $100 million for the first nine months of 2010. This improvement is largely driven by a 18% increase in sales, reaching $15.4 billion, largely attributed to higher realized prices for alumina and aluminum due to increased London Metal Exchange (LME) prices, alongside improved volumes in alumina and downstream segments. Operationally, the company saw improvements across most segments, with Alumina and Primary Metals showing strong revenue growth. Despite increased energy costs and unfavorable foreign currency movements, Alcoa implemented cost-saving initiatives and productivity improvements. However, significant restructuring and other charges, particularly in the 2010 nine-month period totaling $219 million, impacted profitability. These charges were largely related to asset impairments, employee layoffs, and exit costs associated with permanent shutdowns of certain U.S. facilities. The company also managed its debt effectively, issuing new notes while retiring older ones, and maintained a solid cash flow from operations, which increased substantially year-over-year.
Financial Highlights
55 data points| Revenue | $5.29B |
| Cost of Revenue | $4.41B |
| Gross Profit | $874.00M |
| R&D Expenses | $40.00M |
| SG&A Expenses | $232.00M |
| Operating Income | $61.00M |
| Interest Expense | $139.00M |
| Net Income | $61.00M |
| EPS (Basic) | $0.06 |
| EPS (Diluted) | $0.06 |
| Shares Outstanding (Basic) | 1.02B |
| Shares Outstanding (Diluted) | 1.03B |
Key Highlights
- 1Net income attributable to Alcoa was $100 million for the nine months ended September 30, 2010, a significant improvement from a net loss of $874 million in the same period of 2009.
- 2Total sales increased by 18% to $15.4 billion for the nine months ended September 30, 2010, driven by higher realized prices for alumina and aluminum and increased volumes.
- 3Restructuring and other charges totaled $219 million for the nine months ended September 30, 2010, primarily related to asset impairments, employee layoffs, and facility shutdowns.
- 4Cash provided from operations significantly increased to $891 million for the nine months ended September 30, 2010, from $241 million in the prior year.
- 5The company issued $1 billion in new 6.150% Notes due 2020 and used the proceeds for debt retirement and other purposes.
- 6Average realized price per metric ton of aluminum increased by 32% to $2,300 for the nine months ended September 30, 2010, compared to $1,735 in the prior year.
- 7The Alumina segment saw improved profitability driven by higher realized prices and cost savings initiatives, despite higher energy costs and foreign currency headwinds.