 |
|
|
|
|
|
|
| 3rd Quarter Estimate, 2000
Alcoa's Third Quarter Earnings Expected To Be Up 35% From Prior Year; 2000 Nine-Month Earnings Expected To Exceed 1999's Record Year
PITTSBURGH, September 18, 2000 -- Alcoa Inc. announced today that third quarter
earnings are anticipated to be in the range of $350 - $380 million, or 40 to 43
cents per diluted share. This level of net income will represent more than a 35%
increase over the comparable 1999 period. However, it is likely to be below the
record $377 million reported in the 2000 second quarter. Major factors impacting
third quarter earnings include:
» Softening in the transportation,
building, construction, and distribution markets. Declines in these markets,
which were noted in our second quarter earnings review, have continued in the
third quarter. We expect this to represent approximately 4 cents per share
reduction in earnings from the 2000 second quarter;
» Higher energy costs -
largely natural gas and fuel oil - in the current quarter that are expected to
result in a cost increase in excess of 1 cent per share over the 2000 second
quarter. Excluding the impact of higher energy costs, the company noted that it
expects to achieve its quarterly cost reduction goals; and
» The Reynolds
and Cordant acquisitions will continue to be slightly dilutive on a per-share
basis for the quarter. The integration of these acquisitions remains on
schedule; however, these operations have also experienced softening in the key
markets noted above. Going forward, the company expects the acquisitions to be
neutral to earnings per share in the 2000 fourth quarter and accretive in the
2001 first quarter.
Commenting on the softening in certain key markets,
Alcoa CEO Alain Belda said, "Through the second quarter of 2000 we had been able
to offset higher energy costs as well as initial softening in key markets
through continued deployment of the Alcoa Business System and our cost reduction
initiatives.
"However, as these markets continued to decline in the
third quarter, it became likely that even with our efforts, third quarter
earnings will probably fall below the 2000 second quarter level. We feel that it
is in the best interests of our shareholders to share this information now
rather than waiting until our earnings release date of October 5."
For
the nine-month year-to-date period, earnings are estimated to be between $1,080
million and $1,110 million, 50% above the $720 million recorded in the
comparable 1999 period. The 2000 nine-month earnings are expected to exceed the
earnings for all of 1999. This outstanding performance comes in spite of the
softer markets and an increase in year-over-year energy costs of $70 million.
CEO Belda added "As we move forward to the fourth quarter, Alcoa expects
to benefit from the current strength in aluminum prices, the continued
integration of our recent acquisitions, the cost reduction program and the
seasonal strength of our packaging and consumer business. In addition, required
divestitures remain on track and will benefit the company as we move into 2001."
Founded in 1888, Alcoa is the world's leading producer of 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 over 300
operating locations in 36 countries.
Editor's note: Average diluted
shares outstanding are expected to increase from 805 million in the 2000 second
quarter to approximately 880 million in the third quarter as the shares issued
in the Reynolds acquisition have been outstanding for an entire quarter.
Alcoa (NYSE: AA)
Certain statements relate to future events and
expectations and as such constitute forward-looking statements involving known
and unknown risks, uncertainties and other factors that may cause actual
results, performance or achievements of Alcoa to be different from those
expressed or implied in the forward-looking statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include other risk factors summarized in Alcoa's SEC
reports.
Editorial Contact:
Bonita A. Cersosimo
1-412-553-4462
Investor Relations:
Charles D. McLane
1-412-553-2231
| |
|
|
