Alcoa Ends 2010 with Strong Fourth Quarter Results
Alcoa announced fourth-quarter 2010 income from continuing operations of $258 million, the company’s highest quarterly income since the economic downturn and $197 million higher than the third quarter of 2010.
Improved earnings were driven by higher pricing, continued strengthening in most end markets and improved productivity as a result of the company’s Cash Sustainability Program. Results were offset somewhat by a weaker U.S. dollar and higher energy and raw material costs.
“We exceeded all of our targets and continued to build momentum,” said Klaus Kleinfeld, Alcoa chairman and CEO in his comments to analysts and investors Jan. 10. “We delivered all-time record cash from operations, record fourth-quarter free cash flow, improved earnings, grew revenue and paid down debt.
“In 2011, we see aluminum growing another 12 percent on top of last year’s 13 percent improvement. We are well positioned to outpace the recovery in the markets we serve and grow shareholder value,” he added.
Alcoa projects global demand for aluminum to double by 2020. For 2011, the company projects growth in all end markets on a global basis.
Alcoa’s revenue for the fourth quarter totaled $5.7 billion, up 7 percent compared to the third quarter. The increase was driven by an improvement in realized pricing for both alumina (9 percent) and aluminum (11 percent) as well as continued strengthening in most end markets.
Income from continuing operations in the quarter totaled $258 million, up from $61 million in the previous quarter and a loss of $266 million in the fourth quarter of 2009.
For the year 2010, Alcoa’s revenue hit $21.0 billion, up from $18.4 billion in 2009. Income from continuing operations totaled $262 million, up from a loss of $985 million in 2009. Full-year 2010 net income totaled $254 million, up from a net loss of $1.15 billion in 2009.
Alcoa exceeded all targets in its Cash Sustainability Program in 2010. Results for the year include procurement savings of $2.64 billion, overhead savings of $509 million, capital spending reduced to $1.21 billion and working capital at 34 days.