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Alcoa 4Q beats forecasts
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January 8, 2001: 10:43 a.m. ET
Aluminum producer earns 45 cents a share, topping year-earlier profit
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NEW YORK (CNNfn) - Alcoa Inc., the world's biggest aluminum producer, reported a 17 percent increase in fourth-quarter earnings Monday, topping Wall Street forecasts, despite a slowing economy that hurt many of its key customers.
The Pittsburgh-based company, a component of the Dow Jones industrial average, said it earned $392 million, or 45 cents a diluted share in the quarter, up from $334 million, or 44 cents, a year earlier. Wall Street had been expecting a profit of 42 cents a share, according to First Call, which tracks analysts' estimates.
Alcoa attributed its strong fourth-quarter results to successful cost-cutting efforts and acquisitions, even in the face of a slowing U.S. economy.
"Despite increasing softness in the construction, transportation, building, and distribution markets, as well as significantly higher energy prices, Alcoa achieved record performance as a result of rapid integration of new acquisitions and execution of its cost-cutting initiative," Chairman and CEO Alain Belda said in a statement.
The company said it surpassed its savings target of $1.1 billion by $12 million in a cost-cutting program ending in January. Higher energy costs totaling $132 in the past 12 months were excluded.
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 ALCOA BEATS STREET
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4Q EPS 45 cents versus 44 cents
First Call estimate was 42 cents a share
Revenue $6.6 bln vs. $4.3 bln
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It added that its acquisitions of Reynolds Metals Co. and Cordant Technologies last year had a positive impact on earnings in the three months ended Dec. 31, a quarter ahead of schedule.
Fourth quarter revenue rose to a record $6.6 billion from $4.3 billion a year earlier. For the full year 2000, revenue climbed 41 percent to $22.9 billion, from $16.3 billion for 1999.
The company's cost-cutting drive continued Friday when it announced it is reducing production by a combined 150,000 metric tons a year at two smelters in Washington state, citing the energy crisis in the Northwest.
Analysts said that at first glance the results indicated the company was well positioned for growth this year. "In 2001, with its strong cash flow, there will be an awful lot the company will do for investors," said Mark Parr, senior vice president of McDonald Investments Inc.
Higher natural gas, fuel oil and electricity prices have hit Alcoa. The company uses natural gas and fuel oil to convert bauxite, the raw ore, into alumina, which is then used to make aluminum. Production of aluminum, a metal used in everything from cans and cars to building materials, also requires a large amount of electricity.
Alcoa (AA: Research, Estimates) stock rose $2.38 to $35.25 in mid-morning trade Monday.
-- from staff and wire reports 
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Alcoa
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