Core Viewpoint - Alcoa Corporation reported strong fourth-quarter 2024 results, with both adjusted earnings and total revenues exceeding expectations, indicating a positive financial performance compared to the previous year [1]. Financial Performance - Adjusted earnings were $1.04 per share, surpassing the consensus estimate of 93 cents, and improved from an adjusted loss of 56 cents per share in the prior-year quarter [1]. - Total revenues reached $3.5 billion, exceeding the Zacks Consensus Estimate of $3.4 billion, and reflecting a 20% increase from the year-ago quarter [1][4]. Segmental Performance - Alumina production decreased by 2% sequentially to 2.39 million tons, while Aluminum production increased by 2% sequentially to 571,000 metric tons, driven by the Alumar smelter restart in Brazil [3]. - Third-party revenues for the Alumina segment rose by 46% due to higher average realized prices and increased shipments, while the Aluminum segment's revenues increased by 5% from higher average realized prices [4]. Costs and Expenses - Total cost of sales was $2.7 billion, up 11.9% year over year, with selling, general and administrative expenses rising by 25% to $80 million [5]. - Interest expense increased to $45 million from $28 million a year ago, while adjusted net income for the fourth quarter was $276 million, up 104% sequentially [5]. Balance Sheet and Cash Flow - Cash and cash equivalents stood at $1.1 billion, up from $944 million at the end of December 2023, while long-term debt increased to $2.5 billion from $1.7 billion [6]. - The company generated net cash of $622 million from operating activities, a significant increase from $91 million in the prior year, with capital expenditure totaling $580 million compared to $531 million a year ago [6]. Free Cash Flow - Free cash flow was reported at $42 million for the year, a notable recovery from a cash outflow of $440 million in the previous year [7]. Guidance - For 2025, Alcoa anticipates alumina production between 9.5-9.7 million metric tons and shipments between 13.1-13.3 million metric tons, with Aluminum segment production expected to be in the range of 2.3-2.5 million metric tons and shipments between 2.6-2.8 million metric tons [8]. Zacks Rank - Alcoa currently holds a Zacks Rank of 1 (Strong Buy), indicating strong market confidence in the company's performance [9].

Core Viewpoint - The U.S. manufacturing sector is experiencing a steady recovery, supported by easing price pressures and positive economic indicators, making it a favorable environment for investment in manufacturing stocks [2][4]. Manufacturing Sector Performance - The U.S. manufacturing sector closed 2024 positively, indicating a revival in activity [2]. - Industrial production rose by 0.9% in December, significantly exceeding the consensus estimate of 0.3%, with November's figures revised from a decline of 0.1% to an increase of 0.2% [5]. - Capacity utilization for manufacturing increased by 0.4% to 76.6 in December, reflecting underlying economic strength [7]. Key Stocks to Watch - **Alcoa Corp. (AA)**: Expected earnings growth for the current year is over 100%, with a Zacks Rank of 1 [11]. - **EnerSys (ENS)**: Anticipated earnings growth of 14.6% for the current year, with a Zacks Rank of 2 [12]. - **Chart Industries, Inc. (GTLS)**: Expected earnings growth of 48.1% for the current year, also holding a Zacks Rank of 2 [14]. - **Packaging Corp. of America (PKG)**: Projected earnings growth of 4.4% for the current year, with a Zacks Rank of 2 [15]. Economic Indicators - The end of The Boeing Company's strike contributed to a 6.3% increase in aerospace output, while apparel and leather output rose by 1.2% [6]. - The recovery in industrial production follows a period of decline, aided by the Federal Reserve's interest rate cuts totaling 100 basis points since September [8].

Financial Performance - Alcoa's Q4 2024 revenue reached $3486 million, a sequential increase of $582 million compared to Q3 2024[10] - Net income attributable to Alcoa Corporation was $202 million in Q4 2024, compared to $90 million in Q3 2024[10] - Adjusted EBITDA excluding special items for Q4 2024 was $677 million, up from $455 million in Q3 2024[10] - For FY24, Adjusted EBITDA excluding special items was $1589 million, a significant increase from $536 million in FY23[10] - Alcoa returned $90 million to stockholders through quarterly dividends in 2024[7] Operational Highlights - Alumina realized price increased to $636 per metric ton in Q4 2024, compared to $485 per metric ton in Q3 2024[10] - Realized primary aluminum price increased to $3006 per metric ton in Q4 2024, compared to $2877 per metric ton in Q3 2024[10] - The company delivered $645 million in profitability improvement program, exceeding the initial target[7, 20] - Alcoa's working capital decreased to 34 days in Q4 2024[23] Outlook and Strategy - Alcoa expects alumina production to be between 95 million metric tons and 97 million metric tons in FY25[26] - Alcoa expects aluminum production to be between 23 million metric tons and 25 million metric tons in FY25[26] - The company is focused on de-levering the balance sheet and repositioning debt[25, 31]

Financial Data and Key Metrics - No specific financial data or key metrics changes mentioned in the provided content [1][2][3][4][5] Business Line Data and Key Metrics - No specific business line data or key metrics changes mentioned in the provided content [1][2][3][4][5] Market Data and Key Metrics - No specific market data or key metrics changes mentioned in the provided content [1][2][3][4][5] Company Strategy and Industry Competition - No specific company strategy or industry competition details mentioned in the provided content [1][2][3][4][5] Management Commentary on Operating Environment and Future Outlook - No specific management commentary on the operating environment or future outlook mentioned in the provided content [1][2][3][4][5] Other Important Information - The discussion contains forward-looking statements subject to various assumptions and caveats, with factors that may cause actual results to differ materially included in the presentation and SEC filings [4] - Non-GAAP financial measures are included in the presentation, with historical reconciliations available in the appendix, but no quantitative reconciliations for certain forward-looking non-GAAP measures are provided [5] Q&A Session - No Q&A session details provided in the content [1][2][3][4][5]

Core Insights - Alcoa reported $3.49 billion in revenue for Q4 2024, a 34.3% year-over-year increase, with an EPS of $1.04 compared to -$0.56 a year ago, exceeding Zacks Consensus Estimates for both revenue and EPS [1] Financial Performance - Revenue of $3.49 billion surpassed the Zacks Consensus Estimate of $3.41 billion, resulting in a surprise of +2.34% [1] - EPS of $1.04 exceeded the consensus estimate of $0.93, delivering a surprise of +11.83% [1] - Total third-party sales reached $3.49 billion, compared to the average estimate of $3.45 billion, marking a +34.3% change year-over-year [4] Key Metrics - Average realized price per metric ton of alumina was $636, slightly above the estimated $625.59 [4] - Average realized price per metric ton of aluminum was $3,006, below the estimated $3,114.28 [4] - Third-party alumina shipments totaled 2,289 Kmt, exceeding the estimate of 2,127.75 Kmt [4] - Third-party aluminum shipments were 641 Kmt, slightly above the estimate of 639.24 Kmt [4] Segment Performance - Total sales for aluminum were $1.90 billion, compared to the average estimate of $1.97 billion, reflecting a +12.6% year-over-year change [4] - Third-party sales for bauxite reached $128 million, exceeding the estimate of $105.02 million, with a +3.2% year-over-year change [4] - Third-party sales for alumina were $1.47 billion, surpassing the estimate of $1.35 billion, representing an +87.8% change year-over-year [4] - Intersegment sales for alumina were $846 million, exceeding the estimate of $645.07 million, with a year-over-year change of +88.4% [4] - Total sales for alumina were $2.44 billion, compared to the average estimate of $2.05 billion, marking a +80.3% year-over-year change [4]

Financial Data and Key Metrics Changes - Revenue increased by 20% sequentially to $3.5 billion [10] - Net income attributable to Alcoa was $202 million, up from $90 million in the prior quarter, with earnings per share doubling to $0.76 [10] - Adjusted EBITDA rose by $222 million to $677 million, driven by higher alumina and aluminum prices, increased shipments, and lower energy costs [11] Business Line Data and Key Metrics Changes - In the alumina segment, third-party revenue increased by 45% due to higher average realized prices and higher shipments [10] - The aluminum segment saw a 5% increase in third-party revenue, primarily from higher average realized prices [10] - The alumina segment's adjusted EBITDA increased by $349 million, mainly due to higher alumina prices and volumes [11] Market Data and Key Metrics Changes - Alumina prices reached an all-time high in Q4 due to tight market conditions and lower-than-expected supply [26] - Global demand for aluminum remained resilient, particularly in the packaging and electrical sectors, while building and construction faced challenges [27] - The bauxite market is currently tight, with pricing into China at $120-$130 per ton, impacting alumina availability [56] Company Strategy and Development Direction - The company aims to enhance safety and operational excellence, particularly in Brazilian operations, and prioritize customer-focused decisions to become the supplier of choice [24] - Plans for targeted growth through organic and inorganic opportunities where returns exceed the cost of capital [25] - Deleveraging and repositioning debt are priorities for 2025, with expectations of generating sufficient cash for further debt reductions [25] Management's Comments on Operating Environment and Future Outlook - Management noted that alumina prices are expected to remain tight in the first half of 2025, with new production in India and Indonesia needed to balance the market [57] - The outlook for aluminum demand outside China is expected to rebound, supported by higher real incomes and lower interest rates [29] - Management expressed caution regarding potential tariffs and their impact on supply, demand, and trade flows [35] Other Important Information - The company completed a $385 million debt repayment while maintaining its quarterly dividend [9] - The profitability improvement program exceeded its $645 million target ahead of schedule, with significant savings from raw materials and productivity initiatives [8][14] - The company has a cash balance of $1.1 billion and expects capital expenditures of $700 million in 2025 [19] Q&A Session Summary Question: Impact of potential tariffs on Midwest premium and trade flows - Management indicated that the Midwest premium would likely increase significantly if tariffs are imposed, disrupting trade flows and potentially leading to higher costs for U.S. customers [43][45] Question: Net debt position and capital return timing - The company closed the year with $2.1 billion in adjusted net debt and will prioritize deleveraging in 2025, considering capital returns if excess cash is available [50][52] Question: Bauxite availability for new refineries - The bauxite market is tight, and alumina prices are expected to remain high, impacting the ramp-up of new refineries in India and China [56] Question: Cash balance and MOU progress at San Cyprian - Cash consumption is still depleting weekly, and while the MOU is a positive step, it does not guarantee a deal will be reached [62][64] Question: Monetizing excess energy offtake - The company has opportunities to monetize energy in Brazil and potentially in Wort, but these are currently being utilized for smelting operations [66] Question: Monetizing idle sites for data centers - The company has a history of successfully monetizing legacy assets and is in contact with developers for potential sales, but maximum value is the priority [70][73]

Revenue and Sales Performance - Revenue increased to $3.5 billion in Q4 2024, a 20% increase sequentially[5] - Full-year 2024 revenue increased 13% to $11.9 billion[5] - Sales for Q4 2024 increased to $3.486 billion, up 20% from $2.904 billion in Q3 2024 and 34% from $2.595 billion in Q4 2023[27] - Full-year 2024 sales reached $11.895 billion, a 13% increase from $10.551 billion in 2023[28] - Sales grew to $3,486 million in Q4 2024, compared to $2,595 million in Q4 2023[45] Net Income and Profitability - Net income increased 124% sequentially to $202 million in Q4 2024[5] - Net income attributable to Alcoa Corporation for Q4 2024 was $202 million, compared to $90 million in Q3 2024 and a loss of $150 million in Q4 2023[27] - Net income attributable to Alcoa Corporation for 2024 was $60 million, a significant improvement from a loss of $651 million in 2023[28] - Net income for 2024 improved to $24 million from a loss of $773 million in 2023[30] - Net income (loss) attributable to Alcoa Corporation for Q4 2024 was $202 million, compared to $90 million in Q3 2024 and a loss of $150 million in Q4 2023[34] - Diluted EPS for Q4 2024 was $0.76, compared to $0.38 in Q3 2024 and a loss of $0.84 in Q4 2023[34] Adjusted EBITDA and Segment Performance - Adjusted EBITDA excluding special items increased 49% sequentially to $677 million in Q4 2024[5] - Adjusted EBITDA excluding special items for FY2024 increased to $1.6 billion[5] - Segment Adjusted EBITDA for 2024 was $2,065 million, compared to $734 million in 2023[31] - Adjusted EBITDA for Q4 2024 was $675 million, compared to $429 million in Q3 2024 and $92 million in Q4 2023[38] - Adjusted EBITDA for the full year 2024 was $1.519 billion, compared to $473 million in 2023[38] Cash Flow and Financial Position - The company ended 2024 with a cash balance of $1.1 billion[11] - Cash and cash equivalents increased to $1.138 billion at the end of 2024, up from $944 million at the end of 2023[29] - Cash from operations increased significantly to $622 million in 2024, up from $91 million in 2023[30] - Free cash flow for Q4 2024 was $246 million, compared to a negative $3 million in Q3 2024 and $10 million in Q4 2023[40] - Cash and cash equivalents as of December 31, 2024, were $1.138 billion, compared to $944 million as of December 31, 2023[41] - Cash and Cash Equivalents rose to $1,138 million in December 2024 from $803 million in December 2023[43] Debt and Liabilities - Long-term debt increased to $2.470 billion in 2024, up from $1.732 billion in 2023[29] - Net debt as of December 31, 2024, was $1.457 billion, compared to $923 million as of December 31, 2023[41] - Total debt as of December 31, 2024, was $2.595 billion, compared to $1.867 billion as of December 31, 2023[41] - Adjusted Net Debt increased to $2,054 million as of December 31, 2024, compared to $1,673 million in the previous year[43] - Net Debt (Net Cash) rose to $1,457 million in December 2024 from $1,033 million in December 2023[43] - Total Debt increased to $2,595 million in December 2024 from $1,836 million in December 2023[43] - Net Pension/OPEB Liability decreased to $597 million in December 2024 from $640 million in December 2023[43] Production and Shipments - Alcoa expects 2025 Alumina segment production to range between 9.5 to 9.7 million metric tons[13] - Aluminum segment production is expected to range between 2.3 and 2.5 million metric tons in 2025[14] - Alumina production decreased to 10,034 kmt in 2024 from 10,908 kmt in 2023[31] - Third-party alumina shipments dropped to 9,005 kmt in 2024 from 8,698 kmt in 2023[31] - Aluminum production increased to 2,215 kmt in 2024 from 2,114 kmt in 2023[31] - Total aluminum shipments grew to 2,590 kmt in 2024 from 2,491 kmt in 2023[31] Pricing and Realized Prices - Average realized third-party price per metric ton of alumina rose to $472 in 2024 from $358 in 2023[31] - Average realized third-party price per metric ton of aluminum increased to $2,841 in 2024 from $2,828 in 2023[31] Expenses and Charges - Research and development expenses for 2024 totaled $57 million, up 46% from $39 million in 2023[28] - Restructuring and other charges for 2024 amounted to $341 million, an 85% increase from $184 million in 2023[28] - Restructuring and other charges for Q4 2024 were $91 million, compared to $30 million in Q3 2024 and a negative $11 million in Q4 2023[34] Capital Expenditures - Capital expenditures for 2024 were $580 million, up from $531 million in 2023[30] - Capital expenditures for Q4 2024 were $169 million, compared to $146 million in Q3 2024 and $188 million in Q4 2023[40] Working Capital and Receivables - Receivables from customers rose to $1.096 billion in 2024, a 67% increase from $656 million in 2023[29] - DWC Working Capital decreased to $1,289 million in Q4 2024 from $1,414 million in Q3 2024[45] - Days Working Capital improved to 34 days in Q4 2024, down from 45 days in Q3 2024[45] - Receivables from customers increased to $1,096 million in Q4 2024, up from $656 million in Q4 2023[45] - Inventories decreased to $1,998 million in Q4 2024 from $2,158 million in Q4 2023[45] Total Assets and Liabilities - Total assets decreased slightly to $14.065 billion in 2024 from $14.155 billion in 2023[29] Operational Tax Expense - Alcoa expects first quarter 2025 operational tax expense to approximate $120 million to $130 million[17] Profitability Improvements - Alcoa implemented $675 million of profitability improvements in 2024, exceeding its $645 million target[11]

Industry Overview - The U.S. manufacturing sector is experiencing a slow but steady recovery, with significant easing of price pressures over recent months, indicating a revival is gaining momentum [1] - Industrial production rose by 0.9% in December, surpassing the consensus estimate of 0.3%, while November's figures were revised from a decline of 0.1% to an increase of 0.2%, suggesting robust growth in the sector [3] - Capacity utilization for manufacturing increased by 0.4% to 76.6 in December, reflecting underlying economic strength and a robust consumer market [5] Company Insights - Alcoa Corporation (AA) is expected to see earnings growth of over 100% for the current year, with a Zacks Rank of 1, indicating strong buy potential [8] - EnerSys (ENS) anticipates earnings growth of 14.6% for the current year, with a Zacks Rank of 2, showing solid investment potential [9] - Chart Industries, Inc. (GTLS) has an expected earnings growth of 48.1% for the current year and also holds a Zacks Rank of 2, indicating favorable investment prospects [12][13] - Packaging Corporation of America (PKG) expects earnings growth of 4.4% for the current year, maintaining a Zacks Rank of 2, suggesting it is a viable investment option [14] Sector Performance - The end of The Boeing Company's strike contributed to a 6.3% increase in aerospace output, while apparel and leather output rose by 1.2% [4] - Manufacturing output increased by 0.6% in December, following a 0.4% gain in the previous month, indicating a positive trend in production [4] - The recovery in industrial production follows a period of decline in September, aided by the Federal Reserve's interest rate cuts, which have spurred demand in the manufacturing sector [6]

Fourth-quarter 2024 earnings results have come in line with expectations so far. Looking at the fourth quarter as a whole, total earnings for the S&P 500 Index are expected to be up 8.5% from the same period last year on 4.8% higher revenues. This follows 8.4% year-over-year EPS growth on 5.5% higher revenues in the previous quarter.Meanwhile, three momentum stocks with a favorable Zacks Rank are set to beat on earnings this month. An earnings beat is likely to generate more momentum in these stock prices. ...

Group 1 - The stock market is experiencing a rally due to a new Administration, with a focus on stocks with strong earnings trends for long-term performance [1] - Alcoa is highlighted as a Zacks Rank 1 (Strong Buy) stock, recognized as a global leader in bauxite, alumina, and aluminum products [2] - Analyst estimate revisions have led to increased earnings estimates for Alcoa, with the current year estimate rising from 89 cents to 94 cents and next year's estimate increasing from $2.98 to $4.27, indicating a 354% growth [3] Group 2 - Alcoa is projected to achieve revenue growth of 11.48% for the current year and an additional 9.4% next year, reaching $12.87 billion [4] - The stock is currently trading at 9.26x forward earnings and less than 1x sales at 0.93, indicating a favorable valuation [4] - The Price, Consensus, and EPS Surprise Chart shows that Alcoa's earnings and stock price have bottomed out and are now on an upward trend, with growth expected to continue through 2026 [5]