SMART MONEY GROUP

[KingDMC]

AA top/bottom beat and guidance raised.

Alcoa Reports Strong Fourth Quarter 2014 and Full-Year Results as Transformation Strengthens Profitability

Source: Business Wire
4Q 2014 Highlights

Net income of $159 million, or $0.11 per share;
excluding special items, net income of $432 million, or $0.33 per share
Revenue of $6.4 billion, up 14 percent year-over-year
Engineered Products and Solutions 19th consecutive quarter of
year-over-year after-tax operating income growth, excluding Firth Rixson
Global Rolled Products after-tax operating income more than triples
year-over-year, auto growth continues
Upstream business improves performance for 13th consecutive quarter
Alumina after-tax operating income up more than twofold year-over-year
Primary Metals adjusted EBITDA per metric ton strongest since second quarter 2008
Record quarter cash from operations of $1.5 billion
Free cash flow of $989 million, highest since fourth quarter 2010
Alcoa projects 7 percent global aluminum demand growth in 2015
4Q 2014 Transformation Highlights

Completed Firth Rixson acquisition, announced planned purchase of TITAL, and investing in jet engine coating technology in Michigan, U.S., all further strengthening aerospace portfolio
Unveiled MicromillTM for next-generation aluminum sheet
Sold three European rolling mills; Completed closure of Australian can sheet rolling mills
Ma’aden-Alcoa joint venture produced first alumina from Saudi Arabian bauxite
Sold stakes in upstream assets: Jamalco, Jamaica and Mt. Holly, South Carolina
Full-Year 2014 Highlights

Net income of $268 million, or $0.21 per share;
excluding special items, net income of $1.1 billion, or $0.92 per share, up $759 million from 2013
Revenue of $23.9 billion, up 4 percent from 2013
Strongest full-year operating results since 2008
Record results in Engineered Products and Solutions
Cash from operations of $1.7 billion
Free cash flow of $455 million
$1.2 billion in productivity gains
Lightweight metals leader Alcoa (NYSE:AA) today reported a jump in fourth quarter and full-year 2014 profits, culminating a year of significant transformation for the Company. Alcoa is reshaping its portfolio for profitable growth by building its innovative, multi-material value-add businesses and by creating a globally competitive commodity business.

In fourth quarter 2014, Alcoa reported net income of $159 million, or $0.11 per share, which includes $273 million in special items largely tied to previously announced restructurings in the upstream and midstream businesses, aligned with the Company’s objective of enhancing its portfolio.

Year-over-year, fourth quarter 2014 results are up from a net loss of $2.3 billion, or $2.19 per share. Excluding the impact of special items, fourth quarter 2014 net income was $432 million, or $0.33 per share, which rose significantly from fourth quarter 2013 net income of $40 million, or $0.04 per share.

Fourth quarter 2014 revenue was $6.4 billion, up 14 percent from $5.6 billion in fourth quarter 2013. Higher sales in Alcoa’s value-add businesses, comprising the mid and downstream, favorable metal prices and energy sales drove the Company’s year-over-year revenue increase.

“Our strong fourth quarter capped a pivotal year as we significantly accelerated Alcoa’s transformation,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “As we built out our value-add businesses, we gained profitable share across exciting downstream growth markets and captured aerospace and automotive growth in the midstream. On the commodity side, our hard work reshaping the portfolio continues to pay off with improved performance for the 13th quarter in a row. In 2014 we delivered Alcoa’s strongest operating results since 2008; we enter 2015 on solid footing, poised to continue transforming and growing.”

Engineered Products and Solutions reported its 19th consecutive quarter of year-over-year after-tax operating income growth, excluding Firth Rixson. Global Rolled Products continued to benefit from the historic shift to aluminum intensive vehicles, shipping a record volume of automotive sheet. In Global Primary Products, comprising Alumina and Primary Metals, the Alumina segment’s profitability more than doubled year-over-year. Primary Metals adjusted EBITDA per metric ton was the strongest since second quarter 2008, primarily reflecting a lower cost, globally competitive commodity business.

Special items in fourth quarter 2014 included $200 million in restructuring-related costs, approximately 80 percent non-cash, primarily tied to the sales of three European rolling mills (see Value-add Portfolio Transformation below) and an ownership stake in a bauxite mining and alumina refining joint venture in Jamaica (see Upstream Portfolio Transformation below).