Alcoa Inc. Reports Operating Results (10-Q)

Alcoa Inc. (AA) filed Quarterly Report for the period ended 2009-03-31.Alcoa Inc. is the world's leading producer and manager of primary aluminum fabricated aluminum and alumina facilities and is active in all major aspects of the industry. Alcoa serves the aerospace automotive packaging building and construction commercial transportation and industrial markets bringing design engineering production and other capabilities of Alcoa's businesses to customers. In addition to aluminum products and components Alcoa also markets consumer brands including Reynolds Wrap foils and plastic wraps Alcoa wheels and Baco household wraps. Among its other businesses are closures fastening systems precision castings and electrical distribution systems for cars and trucks. Alcoa Inc. has a market cap of $8.69 billion; its shares were traded at around $9.14 with a P/E ratio of 43.5 and P/S ratio of 0.3. The dividend yield of Alcoa Inc. stocks is 7.4%. Alcoa Inc. had an annual average earning growth of 3.5% over the past 10 years.Highlight of Business Operations:Net loss attributable to Alcoa for the 2009 first quarter was $497, or $0.61 per share, compared with net income of $303, or $0.37 per share, for the corresponding period in 2008. Net loss in the 2009 first quarter included a loss of $17 from discontinued operations and net income in the 2008 first quarter included income of $4 from discontinued operations. The amount from discontinued operations in both periods represents the operational results of the Electrical and Electronic Solutions business. In March 2009, Alcoa announced a series of operational and financial actions, which were in addition to those announced at the end of 2008, to significantly improve the Company’s cost structure and liquidity. Operational actions include procurement efficiencies and overhead rationalization to reduce costs and working capital initiatives to yield significant cash improvements. Financial actions include a reduction in the quarterly common stock dividend from $0.17 per share to $0.03 per share beginning with the dividend payable May 25, 2009 and the issuance of 172.5 million shares of common stock and $575 in convertible notes that collectively yielded $1,438 in net proceeds. Restructuring and other charges in the 2009 first quarter were $69 ($46 after-tax and noncontrolling interests), which were comprised of $48 ($32 after-tax and noncontrolling interests) for the layoff of approximately 2,500 employees (2,190 in the Engineered Products and Solutions segment, 160 in the Primary Metals segment, 60 in the Flat-Rolled Products segment, and 90 in Corporate) to continue to address the impact of the global economic downturn on Alcoa’s businesses; $18 ($12 after-tax) for the write-off of previously capitalized third-party costs related to potential business acquisitions due to the adoption of SFAS 141(R) (see Recently Adopted and Recently Issued Accounting Standards); and $3 ($2 after-tax and noncontrolling interests) in net charges associated with previously approved restructuring programs. Restructuring and other charges in the 2008 first quarter were $38 ($29 after-tax and noncontrolling interests), which were comprised of a $36 ($28 after-tax) loss on the sale of the businesses within the former Packaging and Consumer segment and $2 ($1 after-tax and noncontrolling interests) in net charges associated with previously approved restructuring programs. Other expenses, net declined $28, or 48%, in the 2009 first quarter compared with the same period in 2008. The decrease was mostly due to a $188 gain on the Elkem/Sapa AB exchange transaction; mark-to-market gains on derivative contracts; smaller unfavorable foreign currency movements due to a stronger U.S. dollar; and a $22 gain on the sale of property in Vancouver, WA. These positive impacts were partially offset by a $182 realized loss on the sale of the Shining Prospect investment and a decrease in equity income related to Alcoa’s share of the results of Elkem, Sapa AB, and Shining Prospect prior to the exchange and sale of these investments. In March 2009, Alcoa announced a series of operational and financial actions, which were in addition to those announced at the end of 2008, to significantly improve the Company’s cost structure and liquidity. Operational actions include procurement efficiencies and overhead rationalization to reduce costs and working capital initiatives to yield significant cash improvements. Financial actions include a reduction in the quarterly common stock dividend from $0.17 per share to $0.03 per share beginning with the dividend payable May 25, 2009 and the issuance of 172.5 million shares of common stock and $575 in convertible notes that collectively yielded $1,438 in net proceeds. Along with the foregoing actions, cash provided from operations and financing activities is expected to be adequate to cover Alcoa’s current operational and business needs. Read the The complete ReportAA is in the portfolios of Richard Snow of Snow Capital Management, L.P., Prem Watsa of Fairfax Financial Holdings, Inc., HOTCHKIS & WILEY of HOTCHKIS & WILEY Capital Management LLC, Brian Rogers of T Rowe Price Equity Income Fund, Brian Rogers of T Rowe Price Equity Income Fund, PRIMECAP Management, Jean-Marie Eveillard of Arnhold & S. Bleichroeder Advisers, LLC, Dodge & Cox.

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Activities span the world but are strongly represented in Australia and North America with significant businesses in South America, Asia, Europe and southern Africa.