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Alcoa 4Q profit sinks
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January 8, 2002: 1:10 p.m. ET
Aluminum maker posts sharp drop from a year ago but beats Street by a penny.
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NEW YORK (CNN/Money) - Alcoa Corp. said Tuesday its fourth-quarter profit excluding charges was sharply lower than a year earlier, as the world's largest aluminum maker grappled with an economic recession and falling prices.
For the quarter ended Dec. 31, Alcoa (AA: down $0.63 to $37.53, Research, Estimates) earned $99 million, or 11 cents a share excluding items, down from $392 million, or 45 cents a share, a year earlier. Analysts polled by earnings tracker First Call expected a profit of 10 cents a share.
Including $241 million in restructuring charges, the company posted a net loss of 17 cents a share for the quarter. Sales fell to $5.2 billion from $6.6 billion.
"We are not satisfied with these results," CEO Alain Belda said in a statement. "We are confident that the restructuring of our primary and fabricating businesses, coupled with our continued focus on implementing the Alcoa business system and our commitment to grow the company, will enable us to resume sustainable savings and profitable growth in 2002 and beyond."
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CNNfn's David Haffenreffer reports on Alcoa's earnings.
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Alcoa last reported a quarterly net loss in the first quarter of 1994 of $108.3 million, or 61 cents a share, according to a company spokeswoman.
The company said that although the near-term business climate remains challenging, it is confident of achieving $1 billion in cost savings for fiscal 2003, and that it had so far realized $348 million of that goal.
The company warned on Dec. 18 that it would miss fourth-quarter earnings targets and lowered its forecast to 10 cents a share. Wall Street analysts, who had been expecting a profit of 30 cents a share, subsequently lowered their expectations.
In November, Alcoa announced 6,500 job cuts across its 40 locations out of a total work force of 140,000.
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"I thought the results were very good. Even though the revenues were down, costs were under control. Volumes were weak, but we're in the 18th month of an economic slowdown," said Daniel Roling, analyst with Merrill Lynch.
"When you put all that in perspective, particularly with the aluminum prices down, their cost-cutting and management philosophy, and their ability to penetrate markets is what's keeping them in the black. They're not losing money in a recession. We reaffirm our "strong buy" on the stock," Roling added.
For the full year, Alcoa earned $1.3 billion, or $1.46 a share excluding charges, down from $1.5 billion, or $1.80 a share, the prior year. Analysts expected earnings of $1.43 a share, according to First Call.
Including $355 million in after-tax charges, the company posted full-year net income of $908 million, or $1.05 a share. Full-year revenue was flat at $22.9 billion. 
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