Categories Consumer, Earnings, Other Industries

Alcoa Q4 earnings beat estimates amidst tough macro factors

Alcoa’s (NYSE: AA) fourth quarter earnings beat analyst consensus despite tough macro trends due to ongoing trade wars and lower demand for aluminum along with improved supplies resulting in a price decline of about 20% last year.

The company’s adjusted earnings came in at $0.66 per share surpassing street estimates of $0.62 per share. It’s worth noting that for the same period last year, EPS was $1.04. The decline in earnings was primarily due to a drop in commodity prices which impacted the bottom line.

Revenue for the fourth quarter was $3.34 billion, which was in line with analyst estimates of $3.35 billion and saw an increase of 5% sequentially. The improvement in top line was a result of a spike in metal prices in the first half of 2018 and debt reduction measures taken by the firm.

Alcoa rises on upbeat Q3 results, tightens 2018 EBITDA outlook

Last quarter, the company stopped production at Aviles and La Coruna plants due to lower productivity and increased costs. It also retrenched 686 workers who were working in both the plants. Alcoa expects the plant-closure related charges to be in the range of $90 million to $115 million.

Today, it has inked a temporary agreement with ousted employees and upon approval, the company plans to pay the entire amount in 2019. The plant closures are expected to contribute $70 million to $80 million more to the bottom line every year starting from Q3 2019.

On the market outlook front, the company expects the aluminum deficit for 2019 to come in the range of 1.7 million and 2.1 million metric tons and 3% to 4% growth in demand. Alumina is forecasted to become a surplus market due to stockpiling in China and lower global demand while bauxite continues the trend from last year to be a surplus market, primarily due to bumping up of stocks by China.

Post the earnings announcement, Alcoa’s stock was marginally down by 0.6% after the bell. Shares of the company have dwindled nearly 50% last year.

Follow our Google News edition to get the latest stock market, earnings and financial news at your fingertips

Most Popular

Tyson Foods (TSN) Q1 2023 Earnings: Key financials and quarterly highlights

Tyson Foods Inc. (NYSE: TSN) reported first quarter 2023 earnings results today. Sales rose 2.5% year-over-year to $13.2 billion. Net income attributable to Tyson was $316 million, or $0.88 per

After weak start to 2023, Apple (AAPL) sees some bright spots

Apple Inc. (NASDAQ: AAPL) this week reported its first revenue decline in more than three years, even as the high inflation continues to squeeze customers’ spending power. Sales of the

Earnings: Qualcomm (QCOM) Q1 profit falls on lower revenues

Chipmaker Qualcomm, Inc. (NASDAQ: QCOM) has reported lower earnings and revenues for the first quarter of 2023. The company also provided guidance for the second quarter of 2023. At $9.5

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