Why Arconic (ARNC) Shares Are Falling Today

Arconic Corp ARNC reported second-quarter sales growth of 41.5% year-over-year to $2.55 billion, beating the consensus of $2.43 billion.
EPS was $1.05, beating the consensus of $0.77.
Sales by segments: Rolled Products $2.11 billion (+43.4% Y/Y), Building and Construction Systems $329 million (+28% Y/Y) and Extrusions $105 million (+50% Y/Y).
Adjusted EBITDA was $204 million (+9.1% Y/Y), and the margin contracted by 238 bps to 8%.
"We are on track to deliver double-digit adjusted EBITDA growth for a second straight year and, as we announced at our recent investor day, are positioned for several more years of annual growth at similar rates," commented CEO Tim Myers.
Arconic's cash provided by operating activities for the quarter was $162 million, compared to cash used of $(167) million a year ago. Free cash flow was $129 million. The cash balance was $252 million as of June 30. 2022.
The operating income was $144 million for the quarter, compared to a loss of $(495) million a year ago, and the margin was 5.6%.
The company repurchased ~1.3 million during the quarter for ~$37 million.
FY22 Outlook: ARNC updated its FY22 outlook to reflect the impact of declining aluminum prices on revenue and working capital.
Arconic now expects revenue of $9.6 billion - $10.0 billion, compared to the prior $10.1 billion - $10.5 billion, above the consensus of $9.35 billion.
Adjusted EBITDA is expected to be at the low end of the previously guided range of $820 million - $870 million. Free cash flow is now anticipated to be ~$300 million (prior outlook $250 million).
Price Action: ARNC shares are trading lower by 8.79% at $27.75 on the last check Tuesday.

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Arconic Cuts FY22 Top-Line Outlook Citing Declining Aluminum Prices

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