AP
Alcoa 4Q Profit Jumps 76 Percent
Wednesday January 9, 5:42 pm ET
By Daniel Lovering, AP Business Writer
Alcoa 4th-Quarter Earnings Jump 76 Percent on Pending Sale of Packaging, Consumer Businesses


PITTSBURGH (AP) -- Aluminum producer Alcoa Inc. said Wednesday its fourth-quarter earnings soared 76 percent, buoyed by the pending sale of its packaging and consumer businesses.

Net income rose to $632 million, or 75 cents per share, for the three months ended Dec. 31, from $359 million, or 41 cents per share, during the same period a year earlier.

The earnings included a favorable restructuring adjustment and tax benefit totaling $323 million, or 38 cents per share, mostly stemming from the company's recent agreement to sell the packaging and consumer businesses.

Quarterly revenue fell to $7.39 billion from $7.84 billion last year, due to lower metal prices and the exclusion of results from a soft alloy extrusion business that is now part of a joint venture.

The results easily beat Wall Street expectations. Analysts surveyed by Thomson Financial, on average, were looking for earnings of 33 cents per share on $6.92 billion in revenue. Those forecasts typically exclude one-time items.

Alcoa shares rose $1.20, or 3.8 percent, to $32.45 in after-hours trading. Before the results were released, the stock rose 25 cents in regular trading to close at $31.25 per share.

Alain Belda, Alcoa's chairman and chief executive, said revenue for 2007 set an all-time record, growing to $30.75 billion from $30.38 billion the previous year. Income from continuing operations and cash generation also reached record levels, he said.

"We battled substantially higher material input and energy costs and currency impacts while simultaneously continuing to execute on the largest capital investment program in our history," Belda said in a written statement.

Alcoa invested in new plants, expanded production at others, modernized operations, renegotiated long-term power agreements and built new energy facilities to ensure access to power at competitive rates during the year, he said.

The company also continued to invest in growth markets such as Brazil, China and Russia, Belda said.

Profit for 2007 increased 14 percent to $2.56 billion, from $2.25 billion in 2006.

In December, Alcoa said it was selling its packaging and consumer businesses for $2.7 billion cash to Rank Group Ltd., a private New Zealand company. The deal, which includes the Reynolds Wrap foil brand, is expected to close early this year.

Alcoa, based in Pittsburgh with executive offices in New York, is the world's third-largest aluminum producer.

Alcoa Inc.: http://www.alcoa.com