Categories Earnings, LATEST, Other Industries

Earnings: Alcoa slips to Q2 loss as low demand hurts sales; stock falls

Aluminum trends hurt Alcoa Q2 2019 results
Photo Courtesy: Alcoa / Facebook post

Alcoa Corporation (NYSE: AA), a leading manufacturer of aluminum products, reported a net loss for the second quarter compared to profit last year, reflecting a sharp fall in revenues amid faltering demand and lower prices. The bottom-line, however, came in above the consensus estimate.

On an adjusted basis, Alcoa reported a net loss of $0.01 per share for the June quarter, compared to earnings of $1.17 per share in the corresponding period of 2018. Analysts were looking for a wider loss. Unadjusted net loss was $402 million or $2.17 per share, compared to a profit of $10 million or $0.05 per share in the second quarter of last year.

Sales Falter

Revenues declined 24% annually to $2.7 billion and came in broadly in line with the estimates. The top line was negatively impacted by lower demand for aluminum and alumina and unfavorable pricing.

Roy Harvey, chief executive officer of Alcoa, said, “In the second quarter, our Aluminum segment rebounded despite weaker metal prices, and we reported a solid cash balance, even after sizeable cash outlays. We also maintained strong operational performance across all of our businesses.”

Looking Ahead

For the current fiscal year, Alcoa predicts annual bauxite shipments to be 47-48million dry metric tons. Total alumina shipments are expected to be between 13.6 million and 13.7 million metric tons, while aluminum shipments are forecast to be between 28 million and 29 million metric tons.

Related: Alcoa Inc. Q1 2019 Earnings Conference Call Transcript

Of late, Alcoa has been facing multiple challenges, including low demand for its products and uncertainties from the US-China trade dispute. The management has predicted that the global demand for aluminum will remain sluggish throughout the year. The oversupply of alumina in the Atlantic Basin is one of the reasons behind the slump.

Stock Performance

Alcoa is one of the worst-performing Wall Street stocks, which has been on a losing streak for the past two years. It lost about 22% in the past six months and 12% since last year. The stock closed Wednesday’s regular session notably lower and continued to lose in the after-hours session.

We’re on Apple News! Follow us to receive the latest stock market, earnings and financial news at your fingertips

Most Popular

United Parcel Service (UPS) seems on track to regain lost strength

Cargo giant United Parcel Service, Inc. (NYSE: UPS) ended fiscal 2023 on a weak note, reporting lower revenues and profit for the fourth quarter. The company experienced a slowdown post-pandemic

IPO Alert: What to look for when Boundless Bio goes public

Boundless Bio is preparing to debut on the Nasdaq stock market this week, and become the latest addition to the list of biotech firms that have launched IPOs this year.

Nike (NKE) bets on innovation and partnerships to return to high growth

Sneaker giant Nike, Inc. (NYSE: NKE) has been going through a rough patch for some time, with sales coming under pressure from weak demand and rising competition. Post-pandemic, the company

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top