NEW YORK – Alcoa Inc. (AA), the world's biggest aluminum producer, said Monday that fourth-quarter net income fell as a result of lower production due to hurricanes, strikes and restructuring costs.
The company said it was still affected by sky-high costs for raw materials and energy, which were even higher in 2005 than anticipated, although it said it does not expect such substantial price spikes in 2006.
Shares in Alcoa, a component of the Dow Jones Industrial average, fell sharply in after-hours trading, as analysts said the numbers were unclear and seemed to be full of a number of negative items.
"It is a hodgepodge of one-time items. I don't know what they are reporting," said one analyst, who declined to be identified. "Hurricanes happen, and strikes in Spain and the restructuring charge is one-time, but they tell us nothing."
Net earnings were $224 million, or 26 cents per share, compared with $268 million, or 30 cents per share, in the same quarter last year, the Pittsburgh-based company said.
Earnings from continuing operations were $210 million, or 24 cents per share. Analysts on average were expecting earnings of 38 cents per share, according to Reuters Estimates.
With aluminum selling at 17-year highs, revenue rose to $6.67 billion in the quarter from $5.98 billion a year earlier.
"The top line grew 12 percent year-over-year and the bottom line decreased around 16 percent. It gives you an idea of what kind of cost pressures they have and what kind of issues they have around the hurricane and some unplanned outages," said Brian Ropp, credit analyst at T. Rowe Price.
Profitability was cut by $93 million, or 11 cents per share, the company said, by factors including lowered production at refineries in Jamaica and Texas due to the Gulf Coast hurricanes. There was also an unplanned outage at the Portland, Australia smelter and strikes at Spanish plants, as well as restructuring costs for plant closings and layoffs.
Alcoa shares fell 3.4 percent to $29.53 in after-hours trading on Inet from their $30.55 close on the New York Stock Exchange.