Summary
Howmet Aerospace Inc. (HWM), formerly Alcoa Inc., reported its third-quarter and nine-month results for 2014. The company saw a significant improvement in net income attributable to Alcoa shareholders, rising from $24 million in Q3 2013 to $149 million in Q3 2014, and from $54 million for the nine-month period in 2013 to $109 million in 2014. This growth was driven by higher aluminum prices, productivity improvements, and increased energy sales, which offset rising input costs and significant restructuring charges. Financially, Alcoa strengthened its balance sheet through substantial debt and preferred stock issuances, totaling approximately $2.5 billion in the nine months ending September 30, 2014, primarily to fund an anticipated acquisition in the aerospace sector. Cash from operations declined year-over-year, impacted by negative working capital changes, but the company maintained a strong liquidity position with a $4 billion revolving credit facility. Significant restructuring charges were incurred due to ongoing plant closures and capacity reductions, primarily in the Primary Metals segment, impacting reported earnings but reflecting strategic moves to streamline operations.
Financial Highlights
54 data points| Revenue | $6.24B |
| Cost of Revenue | $4.90B |
| Gross Profit | $1.33B |
| R&D Expenses | $57.00M |
| SG&A Expenses | $243.00M |
| Operating Expenses | $5.91B |
| Interest Expense | $126.00M |
| Net Income | $149.00M |
| EPS (Basic) | $0.13 |
| EPS (Diluted) | $0.12 |
| Shares Outstanding (Basic) | 1.18B |
| Shares Outstanding (Diluted) | 1.21B |
Key Highlights
- 1Net income attributable to Alcoa shareholders significantly increased, with Q3 2014 net income reaching $149 million, up from $24 million in Q3 2013.
- 2Sales improved by 8% in Q3 2014 compared to the prior year, driven by higher average realized aluminum prices and increased volumes in midstream and downstream businesses.
- 3The company issued substantial debt and preferred stock, raising approximately $2.5 billion to finance a planned acquisition in the aerospace sector.
- 4Restructuring and other charges amounted to $209 million in Q3 2014 and $780 million for the nine-month period, reflecting ongoing capacity reductions and plant closures.
- 5Cash from operations decreased to $216 million for the nine months ended September 30, 2014, down from $658 million in the prior year, primarily due to working capital changes.
- 6Alcoa maintained a robust liquidity position with a $4 billion revolving credit facility, and no amounts were outstanding under this facility as of September 30, 2014.
- 7The company is actively pursuing strategic growth in the aerospace sector with a planned acquisition of Firth Rixson.