Alcoa tightened its projection for 2018 adjusted EBITDA by incrementing the low end of the prior quarter’s estimate by $100 million and now the company expects adjusted EBITDA to be between $3.1 billion and $3.2 billion. The updated outlook reflects recent market prices, including regional premiums, costs of raw materials, energy, and expected operational performance.
Stocks fall as Trump hits close allies with steel, aluminum tariffs
The company announced $200 million stock repurchase program.
“By reducing complexity, driving returns, and strengthening the balance sheet, we’ve made Alcoa a much stronger company even as commodity markets remain volatile,” CEO Roy Harvey said. “We’re pleased to announce a program to return cash to stockholders, and we look forward to improving our company further as 2018 comes to an end.”
Metal prices are higher this year, mainly due to Donald Trump’s tariffs. Aluminum prices hit a year high in September, a tad more than $1 per pound, versus 89 cents just before Trump’s first tariff announcement in March. Alcoa projected a full-year 2018 global deficit for both aluminum and alumina and a surplus for bauxite.
Alcoa also announced that it dismissed a total of 686 employees from two of its aluminum plants – Aviles and La Coruna – in Spain as the two plants were least productive. Alcoa added that organizational improvements could be achieved if the company ceased production at these two facilities and reorganized production at a single plant in San Ciprian, which produces both alumina and aluminum.
Shares of Alcoa, which plunged to a yearly low ($35.13) last week, rose about 4% in the extended hours of trading. The stock has yielded a negative return of 32% so far in this year and 23% in the past 12 months.