Alcoa Inc (NYSE:AA) kicked off the second quarter earnings round tonight, posting earnings of 18 cents per share or $216 million, excluding items, and revenue of $5.84 billion for the quarter. Analysts had been expecting the aluminum maker to post earnings of 12 cents per share on $5.66 billion in revenue for the quarter.
Reported earnings were 12 cents per share or $138 million, including items. In the same quarter a year ago, Alcoa reported net losses of $119 million or 11 cents per share and net income of 7 cents per share or $76 million excluding items. In the first quarter of this year, the company posted net losses of 16 cents per share of $178 million and net income of 9 cents per share or $98 million excluding items.
Hayden Capital's performance update for the second quarter ended June 30, 2022. Q2 2021 hedge fund letters, conferences and more Dear Partners and Friends, The markets continued to sell-off in the second quarter, especially for internet-based businesses. This year continues to be the toughest stretch for us, since the Hayden’s inception. Inflation concerns and the Read More
Breaking down Alcoa’s earnings report
Alcoa Inc (NYSE:AA) reported sequential and year over year increases in net income and a 7% increase in revenue year over year. The company’s Engineered Products and Solutions segment saw its highest ever after-tax operating income, reaching $204 million for the quarter. The segment also saw a record high adjusted EBITDA margin of 23.1%.
Alcoa Inc (NYSE:AA) said its after-tax operating income for Global Rolled products rose 34% quarter over quarter while its Upstream business reported improved performance for the 11th quarter in a row. In addition, the aluminum maker recorded $302 million in productivity gains overall and saw its lowest net debt since the third quarter of 2007. Alcoa ended the quarter with $1.2 billion in cash on hand. The company saw $518 million in cash from operations and $260 million in positive free cash flow.
“Our second quarter results prove Alcoa’s transformation is in high gear,” said Klaus Kleinfeld, Alcoa Chairman and CEO, in a statement. “We are taking the downstream business to new profitability heights, capturing midstream demand as auto lightweighting accelerates, while continuing to relentlessly improve upstream performance. Our strategy of building a lightweight multi-material innovation powerhouse and a highly competitive commodities business is driving compelling and sustainable shareholder value.”
Alcoa reaffirms forecast
The company reaffirmed its expectations of 7% growth in global aluminum demand this year. Also it reported that the global aluminum deficit is increasing and that the global alumina surplus is declining.
Alcoa Inc (NYSE:AA) also announced plans to acquire jet engine component maker Firth Rixson, which it expects to contribute $1.6 billion in incremental revenues and $350 million in EBITDA by 2016. It plans to sell its ownership stake in Alcoa Minerals of Jamaica.
The company has invested $125 million in its Power and Propulsion segment to expand its offerings for advanced jet engine components. In addition, Alcoa is expanding its Davenport, Iowa facility to address demand in the automotive industry.