Aluminium giant Alcoa last night reported a quarterly loss that was steeper than expected in the face of an 'historic decline' in prices and big restructuring charges. The results were a bleak opening for the US earnings season.
Alcoa, which last week announced massive job cuts and other cost-cutting moves, said its net loss for the past quarter was $1.19 billion, including hefty reorganisation charges.
That amounted to a loss of $1.49 per share, or 28 cents per share excluding one-time items, worse than the average Wall Street estimate of a loss of 10 cents per share.
Alcoa has two plants in Ireland, in Dublin and Dundalk. The Dublin plant is involved in the building product business and a US spokesman for Alcoa said it has yet to be determined how the announced job cuts will affect it.
The Dundalk plant is part of Alcoa's Electrical and Electronic Systems unit, which it has confirmed it will sell. It employs about 70 people.
Alcoa, which is traditionally the first of the blue-chip companies to report quarterly results, said revenues fell 18% in the quarter to $5.7 billion. For all of 2008, the Pittsburgh company swung to a loss of $74m from a 2007 profit of $2.56 billion, as revenues fell 8.1% to $26.9 billion.
Alcoa said results 'were driven by a 35% decline in aluminum prices in the quarter,' including a 56% decline from July, and a sharp drop in demand from the automotive, commercial transportation, building and construction sectors.
'We are taking wide-ranging measures to address the economic downturn,' said Klaus Kleinfeld, president and chief executive of Alcoa.
'We have streamlined our portfolio to focus on businesses where Alcoa is the recognised leader, curtailed production to adjust to weakened demand, reduced global headcount, and achieved significant savings in key raw materials.
'By moving quickly to address the market decline, we are using Alcoa's strategic flexibility and solid liquidity to address the continuing economic uncertainty and emerge even stronger when the economy recovers,' he said.
Alcoa said last week it would slash some 13,500 jobs, or 13%, of its global workforce and reduce output to cope with the global economic downturn. Alcoa also said it was implementing a freeze on hiring and salaries and said it would sell of four of its divisions.
