Alcoa released its latest earnings report after closing bell tonight, posting a wide miss of 7 cents per share in adjusted earnings and sales of $5.6 billion. Analysts had been expecting earnings of 14 cents per share on $5.68 billion in revenue. In last year’s third quarter, the aluminum manufacturer reported earnings of 31 cents per share and $6.2 billion in revenue.
Net income was 2 cents per share or $44 million. Sales declined 11% year over year with a 21% decline due to divestures, headwinds in the market, and closures. A 10% increase in aerospace and automotive sales and Alumina sales partially offset those declines.
Adjusted EBITDA for the Value-Add businesses was $508 million, while revenue for the segment was $3.4 billion. Alcoa recorded record sales of Engineered Products and Solutions at $1.4 billion and a 39% increase in aerospace revenue. Global Rolled Products automotive revenue climbed 133%.
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
Alcoa’s Upstream businesses recorded their best Alumina profitability year to date since 2007 with overall revenue for the segment of 2.2 billion and adjusted EBITDA of $329 million for the Upstream segment. The aluminum manufacturer recorded $287 million in productivity gains in the quarter and $849 million in productivity gains to date.
Alcoa adjusts outlooks
Alcoa management maintained their full year estimates for aerospace sales growth of between 8% and 9% but raised their forecast for airfoil market growth of between 3% and 4% from their previous projection of a 1% to 3% increase.
The company tightened its North American automotive production estimates to between 2% and 4% from their previous estimate of a 1% to 4% gain. It left the heavy duty truck and trailer production outlook of 9% to 11% the same and its commercial building and construction sales growth of 4 to 5% the same.
Alcoa raised its projection for European automotive production growth to an increase of 1% to 3% from the previous expected decline of 1% to 3%. In China, the company cut its automotive growth estimate from between 5% and 8% to between 1% and 2%.
The company also reaffirmed previous projections that global aluminum demand will likely increase 6.5% this year and double between 2010 and 2020. So far within these ten years, demand growth is ahead of their projection. Alcoa management also expects there to be a global aluminum deficit next year.
As of this writing, shares of Alcoa were down 4.54% at $10.51 per share.