Alcoa Announces Highest Quarterly Income and Revenue in Company's History

Alcoa has announced the highest quarterly income and revenue in the company's history. Second quarter income from continuing operations was $473 million, or $0.54 per diluted share, up from $0.31 in the first quarter of 2005 and $0.46 in the second quarter of 2004.

Net income for the quarter was $460 million, or $0.52, up 77 percent over the first quarter's $260 million, or $0.30, and up 14 percent over the $404 million, or $0.46, of the second quarter of 2004.

Both net income and income from continuing operations include the effects of the following previously announced second quarter events:

• The sale of the company's shares of Elkem, a Norwegian metals company, for a $219 million after-tax profit;
• The finalization of certain tax reviews and audits resulting in a benefit of $120 million;
• Charges for restructurings, primarily for employee severance costs and asset impairments including the closure of Hamburger Aluminium-Werk in Germany, of $230 million after taxes as part of a plan to streamline operations;
• Losses during the integration of the new Russian facilities of $29 million after taxes; and
• An increase in the environmental reserve of $14 million after taxes, primarily related to a closed facility in East St. Louis, Ill.

In total, these items net to a positive benefit of $0.08 per share in the quarter.

"We achieved the highest quarterly income and revenues in Alcoa history," said Alain Belda, Alcoa Chairman and CEO. "We delivered strong results and took necessary steps to restructure, control costs, and lay the framework for solid performance over the long term."