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January 10, 2000
Alcoa's Earnings Surge 24% Year-to-Year, Exceed $1 Billion for the First Time
PITTSBURGH--January 10, 2000--
Alcoa announced today that for the first time in its 110 year history,
the company had over a billion-dollars in earnings for the year.
For the year 1999, Alcoa's net income was $1.054 billion, or $2.82 per
diluted share, up 24% from $853 million, or $2.42 per share for 1998.
"Alcoa's excellent performance in 1999 reflects the growing success of
Alcoans worldwide in aligning our processes and systems with the Alcoa
Business System," said CEO Alain Belda. "Our processes are more
efficient, with improved cycle time, less waste, and reduced inventories
as we strive to produce what the customer wants, when it's wanted."
Net income for the 1999 fourth quarter was $333.9 million, or 89 cents
per diluted share, up 53% from $218.3 million, or 59 cents per share,
for the 1998 fourth quarter.
Revenues for the 1999 fourth quarter were $4.3 billion, compared with
$4.2 billion in the year ago quarter. For the full year 1999, revenues
were a record $16.3 billion, compared with $15.3 billion for 1998. "We
continued to make progress on our $1.1 billion cost-reduction
initiative," noted CEO Belda. At the end of 1999, the company had
achieved $728 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
1999 fourth quarter was $182 million, compared with $159 million for the
1999 third quarter.
Results for the 1999 fourth quarter were affected positively by $31
million, or 8 cents per share, related to LIFO inventory reductions
which are tangible results coming from the Alcoa Production System, and
a decrease in Alcoa's effective tax rate from 32% to 29.9% for the year
as a result of a decrease in the Australian income tax rate. The quarter
was affected negatively by an uptick in administrative costs which is
substantially attributable to higher acquisition expenses and incentive
accruals for exceptional performance. Return on shareholders' equity was
17.2% for 1999 and 16.3% for 1998.
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 250 operating locations in 31 countries.
Alcoa Inc. (NYSE: AA)
Financial and operating data for Alcoa and its subsidiaries follow.
Editorial Contact: Bonita A. Cersosimo
Phone: 1 412 553 4462