Alcoa Reports Third Quarter 2007 Income from Continuing Operations of $0.64 Per Share
Tuesday October 9, 4:35 pm ET
Board Increases Share Buyback Program to 25% of Outstanding Shares
NEW YORK--(BUSINESS WIRE)--Alcoa (NYSE:AA - News):
Highlights:
Income from continuing operations of $558 million, or $0.64 per share, a three percent increase from a year ago.
Revenues of $7.4 billion.
Board increases authorization to repurchase shares to 25 percent of outstanding shares, up from previously authorized 10 percent.
Chalco sale and upcoming packaging and automotive castings sales to provide cash and flexibility to enhance shareholder value.
Debt-to-capital stands at 29 percent.
Trailing 12-month ROC stands at 11.8 percent including significant growth investments; excluding investments in growth, ROC is 14.6 percent.
Quarterly results impacted by Chalco gain, restructuring and impairment charges, currency, seasonality, metal prices, higher energy costs and softening markets.
Alcoa (NYSE:AA - News) today reported third quarter income from continuing operations of $558 million, or $0.64 per diluted share. Third quarter income from continuing operations increased three percent from $540 million, or $0.62, in the third quarter of 2006. Income from continuing operations was $716 million, or $0.81, in the second quarter of 2007.
As a result of the Company's strong capital structure and healthy cash flows, Alcoa's Board of Directors has authorized the repurchase of up to 25 percent of the company's outstanding common stock, or approximately 217 million shares. Under the earlier repurchase program, 43 million shares, or approximately five percent, had already been repurchased by the end of the third quarter, leaving the company with authorization to buy back approximately 174 million shares.
"The Chalco sale, combined with proceeds from the upcoming sales of our packaging and auto castings businesses, give us a strong balance sheet, increased flexibility to ramp-up share repurchases, and deliver greater shareholder value," said Alcoa Chairman and CEO Alain Belda.
Net income for the third quarter of 2007 was $555 million, or $0.63, compared to $537 million, or $0.61, in the third quarter of 2006 and $715 million, or $0.81, in the 2007 second quarter. Third quarter results were impacted by the Chalco sale, charges associated with planned asset sales and restructuring, higher petroleum and energy costs, seasonality, lower metal prices and softness in the North American economy.
In the first nine months of 2007, net income was $1.93 billion, or $2.20, compared with $1.89 billion, or $2.16, in 2006. Year-to-date income from continuing operations was $1.95 billion compared with $1.90 billion in 2006.
Revenues for the quarter were $7.4 billion, compared with $7.6 billion in 2006 and $8.1 billion in the 2007 second quarter. This quarter's results were primarily impacted by the exclusion of the company's soft alloy extrusion business as a result of forming a joint venture with Sapa in June, lower metal prices, seasonality and softness in the North American markets.
"Macroeconomic drivers such as the weakening US dollar, higher petroleum costs, and market softness in North America impacted the quarter," said Belda. "Despite these challenges, we have established all-time records for revenue, net income, earnings per share and cash from operations in the first nine months of the year," added Belda.
Cash from operations for the quarter was $592 million, including the impact of approximately $200 million in contributions to the company's pension plans. Year-to-date, cash from operations was $2.47 billion, including pension contributions.
Capital expenditures for the quarter were $941 million, with 66 percent dedicated to growth projects. Year-to-date, the company has invested $1.74 billion in growth projects, or 67 percent of capital expenditures.
The company's debt-to-capital ratio at the end of the third quarter of 2007 stood at 29 percent, the lowest since 1999.
The Company's trailing 12-month return on capital (ROC) stands at 11.8 percent including significant investments in growth projects and construction work in progress; excluding investments in growth and construction work in progress, ROC is 14.6 percent.