Categories Earnings, Other Industries, U.S. Markets News

Arconic beats Q4 bottom and topline estimates, announces spin-off plan

Arconic Inc. (ARNC) results for the fourth quarter of 2018 topped analysts’ views sending the shares up 2% in Friday’s pre-market trading. The company reported earnings of 33 cents per share on revenue of $3.51 billion for the recently concluded quarter. Analysts had expected Arconic to post earnings of $0.30 per share on revenue of $3.42 billion. Shares of Arconic rose about 2% in the pre-market trading.

Revenue growth of 6% in the fourth quarter of 2018 was driven by higher volumes across all segments with double-digit growth in most major end markets. On a GAAP basis, the company earned $0.44 per share versus the loss of $1.51 per share in the prior-year quarter.

For full-year 2019, Arconic expects adjusted earnings to be in the range of $1.55 to $1.65 per share and revenue is predicted to be in the range of $14.3 billion and $14.6 billion.

On Wednesday, the Board appointed John Plant, the current Chairman to serve the company as Chairman and CEO with immediate effect. Arconic also named Elmer Doty as COO. Plant is expected to serve in the role of CEO for one year.

“After a rigorous and comprehensive process, we did not receive a proposal for a full-company transaction that we believe was in the best interests of our shareholders,” said CEO Plant.

Last month, Arconic said that it has determined to no longer pursue a potential sale of the company as part of its strategy and portfolio review. Shares of Arconic plummetted 16% after this announcement.

As part of its strategy and portfolio review, the company announced a spin-off plan today. Arconic will separate into Engineered Products & Forgings and Global Rolled Products, with a spin-off of one of the businesses. Arconic will also explore the potential sale of businesses that do not best fit into Engineered Products & Forgings or Global Rolled Products.

The New York-based aluminum company’s stock, which plunged to a yearly low ($15.63) on December 26, 2018, ended yesterday’s trading session down 3.18% at $17.68. Shares of Arconic have dropped 9% and 16% in the last 30 days and three months period, respectively.

 

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