Results haven't gotten any shinier for aluminum giant Alcoa
Sales for the quarter were $5.06 billion, down from $5.10 billion a year ago. For the year, sales were $20.26 billion, versus $22.50 billion for 2001.
Earnings take a bit more work to parse out because of restructuring charges. The company's loss (including all charges) for the fourth quarter was $223 million, or $0.27 a diluted share. That's wider than the previous Q4's $0.17 per share loss (also including some charges). Net income for its fiscal year was $0.49, compared to $1.05 in 2001.
Excluding charges, Alcoa produced $133 million in income from continuing operations during the quarter, or $0.16 a share. Analysts were expecting $0.25 a share.
The company is largely at the mercy of the business cycle and the global aluminum market, which has been flooded with cheap aluminum from countries like China and Russia. Additionally, U.S. manufacturing weakness continues to take its toll. Factory orders dropped 0.8% in November after posting a 1.4% increase in October. That's the third time in four months that factory orders have declined. Orders for transportation goods, including two of Alcoa's key markets -- cars and airplanes -- dropped 1.9% in November.
Not one to sit idly by, waiting for its economic circumstances to improve, the company is taking control, where possible. It has spent the last year cutting costs and growing lean. Continuing that trend, Alcoa will slash 8,000 jobs in 2003 and sell off some of its underperforming businesses, using the money generated to pay down debt.
The Dow component is in the unenviable position, then, of waiting out the economic storm. Alcoa must be applauded, though, for taking steps to control costs and become more efficient in the meantime.