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Alcoa Corp Shares Bounce After Earnings Miss, Revenue In Line With Estimates

Alcoa released its latest earnings report after closing bell tonight, posting adjusted earnings of 14 cents per share or $26 million on $2.5 billion in revenue, representing a 9% sequential increase in revenue. Analysts had been expecting earnings of 19 cents per share on $2.46 billion in revenue.

Alcoa

The fourth quarter marked the first full quarter following the aluminum maker’s split with Arconic, so the year over year numbers aren’t comparable with the quarter. Arconic is scheduled to release its fourth quarter earnings results on Jan. 31.

Alcoa’s losses widen sequentially

Alcoa posted a net loss of 68 cents per share or $125 million on the back of costs incurred as it streamlined its portfolio. Adjusted EBITDA rose 18% sequentially to $335 million as prices for alumina rose.

“Alcoa’s first reporting period as a new, standalone, publicly-traded company points to our ability to deliver shareholder value,” Alcoa CEO Roy Harvey said in a statement. “Rising alumina and aluminum prices improved the bottom line, our alumina segment had exceptional profit growth in a stronger market environment and doubled margins, while our bauxite business also increased profits and reported robust margins.”

For this year, Alcoa management expects “relatively balanced” bauxite and alumina markets and a “modest” aluminum surplus of 400,000 to 800,000 metric tons. The company expects global aluminum demand to grow 4% year over year in 2017.

Alcoa shares still on the rise

Alcoa shares have climbed by nearly 70% since the company split from Alconic, not only because of the split but also partially because of President Donald Trump’s promise to support companies that create jobs in the U.S. Alcoa is widely expected to win big under Trump, not only because of the jobs it is creating in the U.S. but also because he has promised to slap 45% tariffs on Chinese imports. Much of Alcoa’s competition in the aluminum space comes from China.

Already this year, Alcoa stock has climbed by about 30%,including a more than 4% increase during regular trading hours today. Historically, trading around Alcoa’s earnings reports tend to be rather heavy, especially in the after-hours session.

Shares of Alcoa edged upward by as much as 1.73% to $38.15 in after-hours trades tonight.