widened its loss in the fourth quarter and said it would cut 8,000 jobs, citing weakness in global manufacturing and slack demand in the aerospace industry.
The Pittsburgh-based company posted a net loss of $220 million, or 27 cents a share, compared with a year-ago loss of $42 million, or 17 cents a share, according to generally accepted accounting principles. Excluding charges, the company said it earned 16 cents a share, a penny less than last year. Wall Street analysts, on average, were expecting the company to earn 25 cents a share, according to a survey by Thomson Financial/First Call.
Total revenue for the quarter dropped to $5.06 billion from $5.1 billion. Analysts were expecting $5.52 billion.
The company's shares were down $1.77, or 7.3%, at $22.60 at midmorning on the
New York Stock Exchange. In 2002, the stock lost 36% of its value.
Alcoa recorded a special after-tax charge of $95 million in the fourth quarter to restructure several businesses, including its aerospace, automotive and industrial gas turbine and U.S. smelting operations. The charge will cover employee severance and asset rationalization, and is expected to affect 8,000 employees at more than 70 locations, with a majority of the financial benefits of the move occurring in 2004.
"Global manufacturing weakness has persisted longer than we anticipated," said Alain Belda, chairman and chief executive, in a press release. "In particular, aerospace, industrial gas turbine and telecommunication markets remained soft, reinforcing the need to increase the scope of our cost savings and restructuring initiatives."
The company also said it has completed a review of its portfolio of businesses, which prompted it to exit certain areas. Among the units to be divested are specialty chemicals, specialty packaging equipment, architectural products in North America, commodity automotive fasteners and certain operations in South America, among others.
Proceeds from the sales will be used to pay down debt, increasing the company's flexibility for future growth opportunities in its core businesses, Alcoa said. As a result of the divestitures, the company took a $221 million charge in the fourth quarter of 2002, $78 million of which is related to discontinued operations. That brings the total amount of charges to $316 million for the fourth quarter.