Alcoa Shares Surge On Solid Q2 Results

  • Alcoa Corp AA reported second-quarter revenue growth of 28.6% year-over-year to $3.64 billion, beating the consensus of $3.56 billion.
  • Adjusted EPS improved to $2.67, beating the consensus of $2.45.
  • Adjusted EBITDA increased by 47.7% Y/Y to $913 million and the margin expanded by 324 bps to 25.1%.
  • Aluminum segment revenue increased 6% with higher shipments and regional premiums. The average realized third-party price per metric ton of aluminum was $3,864 in Q2.
  • In Alumina, third-party shipments increased 7% sequentially. In Aluminum, shipments of commodity-grade aluminum were up 9% sequentially.
  • Alumina produced 3.23 million metric tons for the quarter, and Aluminum produced 499,000 metric tons, largely consistent with Q1 output.
  • Alcoa ended the quarter with cash on hand of $1.6 billion. Cash provided from operations was $536 million.
  • The company year-to-date has returned $387 million of capital to stockholders through $37 million in cash dividends and $350 million in share repurchases.
  • Q3 Outlook: Alcoa expects higher sequential profitability in the Bauxite segment with increased shipments as refinery demand improves in the third quarter. In Alumina and Aluminum, shipments are expected to increase.
  • It anticipates an approximately $20 million negative impact on net income in the third quarter as a result of the Warrick line curtailment.
  • FY22 Outlook: Alcoa expects total Aluminum segment shipments of 2.5 and 2.6 million metric tons, the same as prior guidance.
  • It decreased its projection for shipments to range between 13.6 and 13.8 million metric tons.
  • It expects annual bauxite shipments of 44 and 45 million dry metric tons, a change of 2 million dry metric tons.
  • Price Action: AA shares are trading higher by 7.23% at $48.32 during the post-market session on Wednesday.
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