SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 18, 2000
ALCOA INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 1-3610 25-0317820
(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
201 Isabella Street, Pittsburgh, Pennsylvania 15212-5858
(Address of principal executive offices) (Zip code)
Office of Investor Relations 412-553-3042
Office of the Secretary 412-553-4707
(Registrant's telephone number including area code)
Item 5. Other Events.
ALCOA'S THIRD QUARTER EARNINGS EXPECTED TO BE UP 35% FROM PRIOR
YEAR; 2000 NINE-MONTH EARNINGS EXPECTED TO EXCEED 1999'S RECORD
YEAR
PITTSBURGH, September 18, 2000 - Alcoa Inc. announced today
that third quarter earnings are anticipated to be in the range of
$350 - $380 million, or 40 to 43 cents per diluted share. This
level of net income will represent more than a 35% increase over
the comparable 1999 period. However, it is likely to be below
the record $377 million reported in the 2000 second quarter.
Major factors impacting third quarter earnings include:
* Softening in the transportation, building, construction,
and distribution markets. Declines in these markets, which were
noted in our second quarter earnings review, have continued in
the third quarter. We expect this to represent approximately 4
cents per share reduction in earnings from the 2000 second
quarter;
* Higher energy costs -- largely natural gas and fuel oil --
in the current quarter that are expected to result in a cost
increase in excess of 1 cent per share over the 2000 second
quarter. Excluding the impact of higher energy costs, the company
noted that it expects to achieve its quarterly cost reduction
goals; and
* The Reynolds and Cordant acquisitions will continue to be
slightly dilutive on a per-share basis for the quarter. The
integration of these acquisitions remains on schedule; however,
these operations have also experienced softening in the key
markets noted above. Going forward, the company expects the
acquisitions to be neutral to earnings per share in the 2000
fourth quarter and accretive in the 2001 first quarter.
Commenting on the softening in certain key markets, Alcoa
CEO Alain Belda said, "Through the second quarter of 2000 we had
been able to offset higher energy costs as well as initial
softening in key markets through continued deployment of the
Alcoa Business System and our cost reduction initiatives.
However, as these markets continued to decline in the third
quarter, it became likely that even with our efforts, third
quarter earnings will probably fall below the 2000 second quarter
level. We feel that it is in the best interests of our
shareholders to share this information now rather than waiting
until our earnings release date of October 5."
For the nine-month year-to-date period, earnings are
estimated to be between $1,080 million and $1,110 million, 50%
above the $720 million recorded in the comparable 1999 period.
The 2000 nine-month earnings are expected to exceed the earnings
for all of 1999. This outstanding performance comes in spite of
the softer markets and an increase in year-over-year energy costs
of $70 million.
CEO Belda added "As we move forward to the fourth quarter,
Alcoa expects to benefit from the current strength in aluminum
prices, the continued integration of our recent acquisitions, the
cost reduction program and the seasonal strength of our packaging
and consumer business. In addition, required divestitures remain
on track and will benefit the company as we move into 2001."
Founded in 1888, Alcoa is the world's leading producer of
aluminum and alumina, and a major participant in all segments of
the industry: mining, refining, smelting, fabricating and
recycling. Alcoa serves customers worldwide in the packaging,
automotive, aerospace, construction and other markets with a
great variety of fabricated and finished products. The company
has over 300 operating locations in 36 countries.
Editor's note: Average diluted shares outstanding are expected
to increase from 805 million in the 2000 second quarter to
approximately 880 million in the third quarter as the shares
issued in the Reynolds acquisition have been outstanding for an
entire quarter.
Alcoa (NYSE: AA)
Certain statements relate to future events and expectations and
as such constitute forward-looking statements involving known and
unknown risks, uncertainties and other factors that may cause
actual results, performance or achievements of Alcoa to be
different from those expressed or implied in the forward-looking
statements. Important factors that could cause actual results to
differ materially from those in the forward-looking statements
include other risk factors summarized in Alcoa's SEC reports.
Editorial Contact: Bonita A. Cersosimo
1-412-553-4462
Investor Relations: Charles D. McLane
1-412-553-2231
By /s/Richard B. Kelson
Date: September 19, 2000 Richard B. Kelson
Executive Vice President
and Chief Financial
Officer
