Alcoa 4Q profit rises 60 percent

Alcoa 4Q profit rises 60 percent

	Published : Wed, 10 Jan 2007 02:29 By : Agencies Print this Story

PITTSBURGH - Aluminum producer Alcoa Inc. on Tuesday said fourth-quarter profit jumped 60 percent, driven by higher metal prices and strong market demand.

Net income increased to $359 million, or 41 cents per share, from $224 million, or 26 cents per share, during the same period a year earlier. The results include after-tax charges of $386 million, or 44 cents per share, for costs related to a restructuring program that includes the elimination of 6,700 jobs and other operational changes.

Annual revenues and income from continuing operations set all-time records, the Pittsburgh-based company said.

'I am proud of our 2006 accomplishments,' Alain Belda, Alcoa's chairman and chief executive officer, told analysts and reporters in a conference call. 'Am I satisfied with it? No. We will continue to push for improvement.'

Alcoa reported the profit after shares rose 4 cents to close at $28.52 on the New York Stock Exchange. The stock gained another $1.39, or 4.9 percent, to $29.91 in aftermarket trading.

Higher metal prices and strong demand for aluminum in the aerospace, commercial transportation and commercial building markets helped push revenues upward last year, the company said.

Other factors contributing to the results included a gain from the sale of Alcoa's home exteriors business on Oct. 31 for $305 million.

Income from continuing operations for the quarter was $258 million, or 29 cents per share. Excluding restructuring and impairment charges, the company earned $644 million, or 74 cents per share.

Revenue during the quarter grew 20 percent to $7.84 billion from $6.54 billion a year ago.

The results exceeded Wall Street expectations based on results excluding restructuring and other charges. On average, analysts polled by Thomson Financial forecast earnings of 65 cents per share on sales of $7.63 billion.

John Redstone, an analyst with Dejardins Securities, said the company had achieved 'strong numbers.'

'People will argue what the real number is (because of adjustments),' he said. 'But the fact of the matter is that it was better than what most people expected.'

Virtually all the company's operations saw slight improvements, he said. 'I think they should be very satisfied with their performance and I think the market will be as well,' Redstone said.

BMO Capital Markets analyst Victor Lazarovici said the results appeared to be are ally good.'

'I think the key, more than anything else, is that volumes were stronger almost across the board,' he said. 'And that drove higher revenues and higher profits.'

In November, Alcoa announced plans to cut 6,700 jobs to streamline its cost structure and increase profits in a move expected to save the company $125 million annually before taxes. The cuts represent about 5 percent of Alcoa's 129,000 employees in 44 countries.

It also agreed to form a joint venture with the Sapa Group, part of Norway's Orkla ASA, for its soft alloy extrusion business. The new company, to be majority owned by Orkla and operated by Sapa, eventually will be taken public, Alcoa said.

The company, which is headquartered in New York, had annual income from continuing operations of $2.2 billion, or $2.47 per share. Revenues for 2006 reached an all-time record of $30.4 billion, a 19 percent increase from 2005, the company said.