Summary
Howmet Aerospace Inc. (HWM), formerly Alcoa Inc., reported a net loss of $119 million, or $0.11 per diluted share, for the second quarter of 2013, a significant decline from the net loss of $2 million in the prior year's second quarter. For the first six months of 2013, the company reported a net income of $30 million, or $0.03 per diluted share, compared to a net income of $92 million, or $0.08 per diluted share, in the same period of 2012. This decline in profitability was primarily driven by substantial restructuring and other charges, notably a $103 million charge related to a legal matter, along with asset impairments and exit costs associated with permanent smelter shutdowns. Additionally, lower realized prices for aluminum and increased costs for bauxite mining and power plant maintenance negatively impacted results. Despite the overall decline in net income, sales for the second quarter and the first six months of 2013 saw a modest decrease of 2% year-over-year, largely due to lower primary aluminum volumes and unfavorable pricing in the midstream segment. However, the company did report net productivity improvements and favorable foreign currency movements that partially offset these headwinds. The company's liquidity position appears stable, with cash provided from operations improving in the first six months of 2013. However, recent credit rating downgrades by Moody's could increase borrowing costs and trigger collateral postings.
Financial Highlights
53 data points| Revenue | $5.85B |
| Cost of Revenue | $4.93B |
| Gross Profit | $916.00M |
| R&D Expenses | $46.00M |
| SG&A Expenses | $254.00M |
| Operating Expenses | $5.98B |
| Interest Expense | $118.00M |
| Net Income | -$119.00M |
| EPS (Basic) | $-0.11 |
| EPS (Diluted) | $-0.11 |
| Shares Outstanding (Basic) | 1.07B |
| Shares Outstanding (Diluted) | 1.07B |
Key Highlights
- 1Howmet Aerospace Inc. (formerly Alcoa Inc.) reported a net loss of $119 million for Q2 2013, a significant deterioration from a $2 million loss in Q2 2012.
- 2For the six months ended June 30, 2013, net income attributable to Alcoa common shareholders was $30 million, down from $92 million in the prior year.
- 3Restructuring and other charges significantly impacted results, totaling $244 million in Q2 2013 and $251 million for the six-month period, largely due to a $103 million charge for a legal matter and costs associated with permanent smelter shutdowns.
- 4Sales decreased by 2% year-over-year for both the second quarter ($5.85 billion vs. $5.96 billion) and the first six months ($11.68 billion vs. $11.97 billion), driven by lower aluminum volumes and unfavorable pricing.
- 5Average realized prices for primary aluminum declined to $2,237 per metric ton in Q2 2013 from $2,329 in Q2 2012.
- 6Cash provided from operations improved to $444 million for the first six months of 2013, up from $301 million in the same period of 2012, indicating stronger operational cash generation.
- 7The company experienced credit rating downgrades from Moody's to below investment grade, leading to increased collateral postings and potential for higher borrowing costs.