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Alcoa Corporation Reports Second Quarter 2017 Results

PITTSBURGH--(BUSINESS WIRE)--Alcoa Corporation (NYSE: AA):

“Through the first half of the year, our adjusted EBITDA topped $1 billion, and we expect improvements in the second half of 2017, despite higher input costs.”

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  • Net income of $75 million, or $0.40 per share
  • Excluding special items, adjusted net income of $116 million, or $0.62 per share
  • Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA), excluding special items, of $483 million, down 9 percent sequentially on lower alumina prices
  • Revenue of $2.9 billion, up 8 percent sequentially, on higher shipments
  • $954 million cash balance and $1.4 billion of debt for net debt of $0.5 billion as of June 30, 2017
  • Company tightened its 2017 outlook for adjusted EBITDA, excluding special items, to $2.1 billion to $2.2 billion2

M, except per share amounts

2Q16 1Q17 2Q17
Revenue $ 2,323 $ 2,655 $ 2,859
Net (loss) income attributable to Alcoa Corporation $ (55 ) $ 225 $ 75
Earnings per share attributable to Alcoa Corporation $ (0.29 ) $ 1.21 $ 0.40
Adjusted net (loss) income $ (44 ) $ 117 $ 116
Adjusted earnings per share $ (0.23 ) $ 0.63 $ 0.62
Adjusted EBITDA excluding special items $ 310 $ 533 $ 483

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1 Alcoa Corporation became an independent, publicly traded company on November 1, 2016. Prior to November 1, 2016, Alcoa Corporation’s financial statements were prepared on a carve-out basis, as the underlying operations of the Company were previously consolidated as part of Alcoa Corporation’s former parent company’s financial statements. Accordingly, the financial results of Alcoa Corporation for the first ten months of 2016 (including the first month of fourth quarter 2016) were prepared on such basis. The carve-out financial statements of Alcoa Corporation are not necessarily indicative of Alcoa Corporation’s consolidated results of operations, financial position, and cash flows had it been a standalone company during the referenced period. See the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the period ended December 31, 2016 filed with the United States Securities and Exchange Commission on March 15, 2017 for additional information.

2 Based on actual results for 1H17, outlook for 2H17 at $1,900 LME, $305 API, and updated regional premiums and foreign currencies.

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Alcoa Corporation (NYSE: AA), a global leader in bauxite, alumina, and aluminum products, today reported second quarter 2017 results. On a sequential basis, the Company increased revenue on higher shipments and grew its cash balance. Alcoa additionally maintained solid profitability despite lower alumina pricing.

The Company tightened its outlook for full-year adjusted 2017 EBITDA, excluding special items, to $2.1 to $2.2 billion, from $2.1 to $2.3 billion, based on current market assumptions. In addition, Alcoa now expects negative $50 million in net performance for full year 2017, as strength in the global aluminum market drives up input costs.

“Alcoa generated solid profitability in the second quarter with strong cash flow that grew our cash balance to more than $950 million,” said Roy Harvey, President and Chief Executive Officer. “Through the first half of the year, our adjusted EBITDA topped $1 billion, and we expect improvements in the second half of 2017, despite higher input costs.”

Harvey continued: “We are pursuing a simple set of strategic priorities to reduce complexity, drive returns and strengthen the balance sheet, and we will continue to base each of our decisions on these three key levers for the benefit of our stockholders.”

In second quarter 2017, Alcoa reported net income of $75 million, or $0.40 per share. Results include the negative impact of $41 million in special items, primarily for certain tax items and additional restructuring charges related to previous actions. Second quarter 2017 results compare to first quarter 2017 net income of $225 million, or $1.21 per share, which included a $120 million gain from the sale of the Yadkin Hydroelectric Project.

Excluding the impact of special items, second quarter 2017 adjusted net income was $116 million, or $0.62 per share. In first quarter 2017, Alcoa’s adjusted net income was $117 million, or $0.63 per share, excluding special items.

Alcoa reported second quarter 2017 adjusted EBITDA excluding special items of $483 million, down 9 percent from $533 million in first quarter 2017. The decline was mainly due to lower alumina prices, which rebounded late in the quarter, partially offset by higher aluminum prices and other factors.

In second quarter 2017, Alcoa reported revenue of $2.9 billion, up 8 percent sequentially, reflecting higher shipments across its product portfolio.

The Company’s second quarter cash from operations was $311 million and free cash flow was $223 million. Alcoa ended second quarter 2017 with cash on hand of $954 million with $1.4 billion of debt for net debt of $0.5 billion. The Company reported 18 days working capital.

On July 11, 2017, Alcoa announced plans to restart three of five potlines at its Warrick Operations smelter to...


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