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As a result of the company’s strong capital structure and healthy cash flows, Alcoa’s board of directors has authorized the repurchase of up to 25% of the company’s outstanding common stock, or approximately 217 million shares. Under the earlier repurchase program, 43 million shares, or approximately 5%, had already been repurchased by the end of the third quarter, leaving the company with authorization to buy back approximately 174 million shares.
“The Chalco sale, combined with proceeds from the upcoming sales of our packaging and auto castings businesses, give us a strong balance sheet, increased flexibility to ramp-up share repurchases, and deliver greater shareholder value,” said Alcoa Chairman and CEO Alain Belda.
Net income for the third quarter of 2007 was $555 million, or $0.63, compared to $537 million, or $0.61, in the third quarter of 2006 and $715 million, or $0.81, in the 2007 second quarter. Third quarter results were impacted by the Chalco sale, charges associated with planned asset sales and restructuring, higher petroleum and energy costs, seasonality, lower metal prices, and softness in the North American economy.
In the first nine months of 2007, net income was $1.93 billion, or $2.20, compared with $1.89 billion, or $2.16, in 2006. Year-to-date income from continuing operations was $1.95 billion compared with $1.90 billion in 2006.
Revenues for the quarter were $7.4 billion, compared with $7.6 billion in 2006 and $8.1 billion in the 2007 second quarter. This quarter’s results were primarily impacted by the exclusion of the company’s soft alloy extrusion business as a result of forming a joint venture with Sapa in June, lower metal prices, seasonality and softness in the North American markets.
“Macroeconomic drivers such as the weakening U.S. dollar, higher petroleum costs, and market softness in North America impacted the quarter,” said Belda. “Despite these challenges, we have established all-time records for revenue, net income, earnings per share and cash from operations in the first nine months of the year.”
After tax operating income (ATOI) for the alumina segment was $215 million, a decrease of $61 million, or 22%, from the prior quarter. System production decreased by a net of 24 kmt as production increases throughout the system offset much of the loss in Jamaica due to Hurricane Dean. Higher energy costs, the weakening U.S. dollar and hurricane damages also impacted the quarter.
Additional information is available at www.alcoa.com.