Arconic Clocks 46% Sales Growth In Q4, Guides FY22 Revenue Above Consensus

  • Arconic Corp ARNC reported fourth-quarter sales growth of 46.2% year-over-year to $2.13 billion, beating the consensus of $2.08 billion.
  • The increased sales reflect higher aluminum prices and growth in packaging, industrial, and ground transportation volumes.
  • Sales by segments: Rolled Products $1.79 billion (+56.9% Y/Y), Building and Construction Systems $261 million (+10.6% Y/Y) and Extrusions $87 million (+2.4% Y/Y).
  • Loss per share improved to $(0.36) compared to $(0.59) in 4Q20.
  • The operating income was $22 million for the quarter, compared to a loss of $(46) million a year ago, and the margin was 1.03%.
  • Adjusted EBITDA was $175 million (+15.9% Y/Y), and margin contracted by 215 bps to 8.2%.
  • Arconic's cash provided by operating activities for the quarter was $96 million, compared to cash used of $12 million a year ago. Adjusted Free cash flow was $89 million.
  • During the quarter, the company repurchased ~1.8 million shares at an average price of $30.56 for a total of ~$55 million.
  • The cash balance was $335 million at quarter-end, with total available liquidity of ~$1.1 billion.
  • "Throughout the year we took swift action to offset automotive market disruptions and aerospace industry weakness while navigating ongoing pandemic-related labor issues and rising costs," said CEO Tim Myers.
  • "While 2022 is starting with similar challenges, our end markets are strong and we expect to deliver another year of double-digit Adjusted EBITDA growth," Myers added.
  • FY22 Outlook: Arconic expects revenue of $9.9 billion - $10.3 billion, above the consensus of $8.71 billion.
  • It expects Adjusted EBITDA of $800 million - $850 million. Free cash flow to be ~$250 million.
  • Price Action: ARNC shares are trading lower by 2.87% at $31.54 on the last check Friday.

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