Summary
Howmet Aerospace Inc. (HWM), formerly Alcoa Inc., reported a net loss attributable to common shareholders of $178 million, or $0.16 per diluted share, for the first quarter of 2014. This contrasts with a net income of $149 million, or $0.13 per diluted share, in the same period of 2013. The significant decline was primarily driven by substantial restructuring and other charges totaling $461 million, related to permanent shutdowns of four smelters and two rolling mills, as well as temporary curtailments at two other smelters. Lower realized prices for aluminum also contributed to the weaker performance. Despite the net loss, the company's sales saw a decrease of 6% year-over-year, largely due to lower primary aluminum volumes and unfavorable pricing. However, cost of goods sold as a percentage of sales improved slightly due to productivity gains and favorable foreign currency movements. The company's balance sheet shows total assets of $35.6 billion and total liabilities of $21.2 billion, with shareholders' equity at $11.4 billion. Cash flow from operations was negative, indicating significant cash usage during the quarter, primarily due to unfavorable working capital changes.
Financial Highlights
53 data points| Revenue | $5.45B |
| Cost of Revenue | $4.50B |
| Gross Profit | $959.00M |
| R&D Expenses | $51.00M |
| SG&A Expenses | $236.00M |
| Operating Expenses | $5.73B |
| Interest Expense | $120.00M |
| Net Income | -$178.00M |
| EPS (Basic) | $-0.16 |
| EPS (Diluted) | $-0.16 |
| Shares Outstanding (Basic) | 1.10B |
| Shares Outstanding (Diluted) | 1.10B |
Key Highlights
- 1Reported a net loss of $178 million ($0.16/share) for Q1 2014, compared to a net income of $149 million ($0.13/share) in Q1 2013.
- 2Incurred significant restructuring and other charges of $461 million related to capacity reductions, including permanent shutdowns of four smelters and two rolling mills.
- 3Sales decreased by 6% to $5.45 billion in Q1 2014 compared to $5.83 billion in Q1 2013, driven by lower volumes and realized prices for aluminum.
- 4Cost of goods sold as a percentage of sales improved slightly due to productivity gains and favorable currency movements.
- 5Cash flow from operations was negative at $(551) million, a notable decrease from $(70) million in the prior year's quarter, largely due to working capital changes.
- 6The company's credit rating was downgraded by Moody's and Fitch, raising concerns about potential impacts on financing costs and access to capital.