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Alcoa misses forecast
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January 8, 1998: 5:38 p.m. ET
Despite record revenues, company issues disappointing earnings report
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NEW YORK (CNNfn) - Despite record revenues and shipments for 1997, Aluminum Co. of America Thursday reported disappointing fourth quarter profits, sending its shares sharply lower.
The world's largest aluminum maker earned $210.3 million, or $1.23 a share in the fourth quarter of 1997 on revenues of $3.3 billion.
However, those results included a one-time gain of $32.7 million or 19 cents a share for the sale of its interest in a Brazilian cable system and the sale of land in Japan. Excluding the gains, Alcoa's operating profit was $1.04 a share, well below the First Call consensus of $1.22.
The fourth quarter results compared to a profit of $136.1 million, or 78 cents a share a year ago. Sales for the latest quarter were flat at $3.3 billion.
For the full year, Alcoa reported earnings of $805.1 million, or $4.66 a share, for 1997 compared to $514.9 million, or $2.94 a share, for 1996. Revenues in 1997 reached a record $13.3 billion compared to $13.1 billion last year.
"I am pleased with our performance in 1997," said Paul O'Neill, Alcoa's chairman and chief executive officer. "The 1997 year was one of continued worldwide growth for Alcoa. Increased demand for our products, coupled with relentless improvements in operating efficiencies more than offset lower fabricated aluminum prices."
The results were announced prior to Thursday's market close. Alcoa (AA) shares ended down 3 to 68. No movement was reported after hours.
O'Neill said the company is focused on growing its business throughout the world and hopes to reach $20 billion in revenues by the year 2000.
One-time items for the year included after-tax losses of $11.7 million, or 7 cents a share, to cover costs related to aluminum commodity contracts.
Shipments of aluminum products during the fourth quarter were 734,000 metric tons, down from 747,000 metric tons a year ago. For 1997, shipments were a record 2.95 million metric tons compared to 2.84 million in 1996.
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Alcoa
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