Alcoa (NYSE:AA) today reported a sequential and year-over-year increase in third quarter profit for 2013 driven by strong operating performance and productivity gains, in spite of lower metal prices. Alcoa reported third quarter 2013 net income of $24 million, or $0.02 per share, which includes $96 million of special items primarily tied to optimizing the Company’s upstream portfolio.
Excluding the impact of special items, net income was $120 million, or $0.11 per share. Results were led by continued strength in Engineered Products and Solutions and Global Rolled Products, despite traditional third quarter weakness. Global Primary Products overcame falling metal prices and lower premiums to deliver significant performance improvement through productivity gains.
The Company reported third quarter 2013 revenue of $5.8 billion, steady compared to second quarter 2013 and the year ago period, despite a 3 percent sequential and 7 percent year-over-year decline in the London Metal Exchange (LME) cash price of aluminum.
“Our performance this quarter shows our repositioning of the Company is on the right path,” said Klaus Kleinfeld, Alcoa Chairman and Chief Executive Officer. “We continued to build our value-add businesses, capturing demand for innovative material solutions across multiple markets. Our commodity business delivered better performance in a tougher market environment, and we continued to reshape the portfolio to lower the cost base. Across the board, productivity was exceptional – achieving our full year target in the first nine months.”In the first three quarters of 2013, Alcoa’s value-add businesses, comprising Engineered Products and Solutions and Global Rolled Products, accounted for 57 percent of total revenues and 79 percent of segment after-tax operating income (ATOI). Over the last 10 years, Alcoa has grown its value-add businesses to be more meaningful contributors to the Company’s overall profitability. ATOI for the value-add businesses has nearly tripled since 2003. Third quarter 2013 net income of $24 million, or $0.02 per share, compares to a net loss of $119 million, or $0.11 per share, in second quarter 2013, and a net loss of $143 million, or $0.13 per share, in third quarter 2012.