1st Quarter, 2000

Alcoa Earnings Up 60% From 1999 First Quarter

First Quarter
2000 1999 % change

Revenues $4,531 $3,985 14
Net Income 355 221 61
Earnings per share .95 .60 58
Return on Shareholders’ Equity
21.5 14.1 52
(in millions, except for share amounts)

PITTSBURGH, April 6, 2000 - Alcoa today reported net income of $355 million (95 cents per diluted share) for the first quarter of 2000 compared with net income of $221 million (60 cents per share) for the 1999 first quarter.

"The combination of operating efficiencies and higher prices resulted in the strongest quarter Alcoa has ever had," noted President and CEO Alain Belda. "The improvement is significant, with net income up 60% from the year ago quarter."

"Comparing the first quarter 2000 with the fourth quarter of 1999, net income increased 26%, excluding the favorable impact of LIFO and tax adjustments in the '99 fourth quarter," continued Mr. Belda.

Revenues for the 2000 first quarter were $4.5 billion compared with $4.0 billion for the 1999 first quarter.

Return on shareholders' equity for the first three months of 2000, annualized, was 21.5%, compared with 14.1% for the year-ago period.

Alcoa also stated that, at the end of the 2000 first quarter, the company had achieved $832 million in annualized cost savings towards its $1.1 billion target. Announced in mid-1998, this aggressive target is to be achieved by January 1, 2001. The quarterly run rate at the end of the quarter was $208 million, compared with $182 million for the 1999 fourth quarter.

Alcoa continued to improve after tax operating income (ATOI), which was up 35% from the fourth quarter of 1999. ATOI improved in all of the company's five business segments, with the majority of the improvement in two segments: primary aluminum and alumina. Higher prices and productivity improvements were the key drivers in these two segments.

Alcoa noted that GA&SE expense in the 2000 quarter is in line with the company's target at 5% of sales.

Regarding Alcoa's pending acquisitions, Mr. Belda stated, "We are confident that the acquisitions of Reynolds Metals and Cordant Technologies will receive regulatory approval. We expect both transactions to be completed in the second quarter."

Alcoa noted that last night, the waiting period for a second request from the U.S. regulatory agency regarding Cordant Technologies expired; Alcoa anticipates no U.S. regulatory problems. Regulatory filings in Europe regarding Cordant will be made shortly.

Founded in 1888, Alcoa is the world's leading producer of primary aluminum, fabricated aluminum and alumina, and a major participant in all segments of the industry: mining, refining, smelting, fabricating and recycling. Alcoa serves customers worldwide in the packaging, automotive, aerospace, construction and other markets with a great variety of fabricated and finished products. The company has 228 operating locations in 32 countries.

Financial and operating data for Alcoa and its subsidiaries follow.

Editorial Contact:
Bonita A. Cersosimo
1 412 553 4462

Investor Relations:
Edgar M. Cheely

Financial Report [13KB]

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