Financial Data and Key Metrics Changes - Revenue decreased 1% sequentially to $3 billion, with net income attributable to Alcoa increasing to $232 million from $164 million in the prior quarter, resulting in earnings per share of $0.88 [10][11] - Adjusted EBITDA was $270 million, reflecting a sequential decrease of $43 million primarily due to increased U.S. Section 232 tariff costs and lower alumina prices [11][12] - The year-to-date return on equity was 14.5%, with cash flow activities showing $1.5 billion in cash at the end of the quarter [13][14] Business Line Data and Key Metrics Changes - In the alumina segment, third-party revenue decreased 9% due to lower volumes and bauxite prices, while the aluminum segment saw a 4% increase in revenue driven by higher average realized prices [10][12] - Adjusted EBITDA for the alumina segment decreased by $72 million, while the aluminum segment's adjusted EBITDA increased by $210 million due to higher metal prices and lower alumina costs [11][12] Market Data and Key Metrics Changes - Alumina prices have declined significantly, with recent prices around $315 per metric ton, while LME prices for aluminum rose approximately 7% sequentially to $2,775 per metric ton [17][18] - The Midwest premium has increased, reaching import parity, which reflects declining inventories and reduced aluminum imports [18][19] Company Strategy and Development Direction - The company is focused on safety, operational stability, and strategic investments, including a new long-term energy contract for Massena operations and a $60 million investment in anode bake furnace [7][9] - Alcoa is also developing a gallium plant in Australia, supported by U.S. and Australian governments, which will enhance its role in the critical minerals supply chain [6][29] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of safety following a workplace fatality and emphasized the commitment to improving operational performance and profitability [4][9] - The outlook for the fourth quarter includes expectations for higher shipments and improved performance in the alumina segment, while anticipating increased tariff costs [15][16] Other Important Information - The company announced the permanent closure of the Kwinana Refinery, which will impact asset retirement obligations and restructuring charges [11][14] - The approvals process for Australian mining operations is progressing, with expectations for ministerial approvals by the end of 2026 [8][9] Q&A Session Summary Question: Capital allocation and M&A opportunities - Management indicated a priority to pay down debt while evaluating returns to shareholders and potential M&A opportunities across the product line [23][25][27] Question: U.S.-Australia Alcoa partnership - The partnership was initiated with Japanese entities and aims to establish a gallium supply chain outside of China, with first production targeted by the end of 2026 [29][30] Question: Canadian-U.S. negotiations regarding tariffs - Management is providing information to both governments to facilitate understanding of trade flows, emphasizing the U.S. aluminum supply shortage [34][58] Question: Demand dynamics in the U.S. market - Management noted steady demand in packaging and electrical sectors, with weakness in automotive attributed to tariff uncertainties and potential substitution by electric vehicles [80] Question: Updates on aluminum safeguards in Europe - Management mentioned that the next significant regulations in Europe will be CBAM, expected to positively impact Alcoa by raising European premiums [82]

Financial Data and Key Metrics Changes - Revenue decreased 1% sequentially to $3 billion, with the Alumina segment seeing a 9% decrease in third-party revenue due to lower volumes and bauxite prices [16] - Net income attributable to Alcoa was $232 million, up from $164 million in the prior quarter, with earnings per share increasing to $0.88 [17] - Adjusted EBITDA was $270 million, reflecting a sequential decrease of $43 million primarily due to increased U.S. Section 232 tariff costs [18][19] - Year-to-date return on equity was 14.5%, and cash flow activities included a tax refund of $69 million from the Australian Tax Office [21][22] Business Line Data and Key Metrics Changes - In the Alumina segment, third-party revenue decreased 9% due to lower volumes and prices, while the Aluminum segment saw a 4% increase in revenue driven by higher average realized prices [16] - Adjusted EBITDA for the Alumina segment decreased by $72 million, while the Aluminum segment's adjusted EBITDA increased by $210 million due to higher metal prices and lower alumina costs [19] Market Data and Key Metrics Changes - Alumina prices have declined significantly, with recent prices around $315 per metric ton due to ample spot availability and refinery expansions in Indonesia and China [26] - LME prices rose approximately 7% sequentially, recently reaching $2,775 per metric ton, reflecting a combination of factors including a weaker U.S. dollar and persistent supply tightness [29] - The Midwest premium increased during the third quarter, reaching import parity, which reflects declining inventories and reduced aluminum imports [30] Company Strategy and Development Direction - The company is focused on increasing profitability through higher shipments, improved operations, and key investments such as the Messina Energy contract and anode bake furnace [14] - A new long-term energy contract for Messina operations was announced, along with a $60 million investment in the anode bake furnace to enhance operational efficiency [12] - The company is evaluating M&A opportunities across the product line but does not have a specific focus at this time [41] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of safety following a workplace fatality and reiterated their commitment to providing a safe working environment [5][6] - The outlook for the Alumina segment is expected to improve by approximately $80 million in 2025, while the Aluminum segment anticipates unfavorable impacts of about $20 million due to restart inefficiencies [23][24] - Management noted that demand remains steady across Europe and North America, with healthy growth in packaging and electrical sectors, while the automotive sector is weak [31][32] Other Important Information - The company announced a partnership with the U.S. and Australian governments to develop a gallium plant at the Wagerup alumina refinery, which is expected to provide strategic benefits [10][11] - The Kwinana refinery's permanent closure resulted in significant asset retirement obligations, impacting the financial results [8][17] Q&A Session Summary Question: Capital allocation and M&A opportunities - Management indicated that they are close to their net debt target and will prioritize debt repayment while evaluating returns to shareholders and growth options [40][41] Question: U.S.-Australia Alcoa partnership - The partnership was initiated with Japanese entities and aims to establish a gallium supply chain outside of China, with first production expected by 2026 [45][48] Question: Canadian negotiations and domestic capacity expansion - Management is providing information to both U.S. and Canadian governments regarding trade flows and noted that competitive energy prices for long-term contracts in the U.S. are still lacking [54][55] Question: Gallium project economics and mining permitting - The gallium project is not a large investment and will be financed by several governments, with no impact on the ongoing mining permitting process [66][67] Question: Interest in idled assets and data centers - Management confirmed ongoing interest in data centers and AI centers, with significant efforts to market sites with existing electrical infrastructure [120] Question: Demand profile and market conditions - Management does not see significant demand destruction but noted weakness in the automotive sector, attributing it to potential substitution by electric vehicles from China [122]

Company Performance - Alcoa missed revenue targets due to shipments in transit at the end of the quarter, expected to be recognized in the fourth quarter [2] - The company met consensus earnings estimates through tight cost control [3] - Alcoa achieved production records in several facilities [2] Strategic Initiatives & Market Dynamics - Alcoa announced an investment in its Western Australia facility to extract approximately 10% of the world's gallium supply, aiming for market entry by the end of 2026 [5][6] - This gallium project strengthens relationships between Alcoa, the US government, the Japanese government, and the Australian government [6] - The project aims to provide gallium to the rest of the world, reducing reliance on China, which currently extracts and processes over 90% of the world's gallium [5] - Alcoa secured a long-term power contract in Massena, New York [4] - Alumina prices have decreased sharply over the past 90 days, with approximately 40% of the Chinese market currently underwater [8] Refining Capacity - Alcoa does not see a need to shut down any refining capacity due to its cost position, with its refining capacity primarily in the first quartile of the cost curve [7][8]

Core Insights - Alcoa reported a revenue miss due to shipments in transit at the end of the quarter, but production records were achieved in several facilities, indicating solid operational performance [2] - Earnings met consensus estimates, attributed to tight cost control and execution of strategic initiatives, including a significant gallium investment announcement [3][4] - A long-term power contract was secured in Msina, New York, which is expected to support future operations [4] Production and Market Dynamics - Alcoa's production of alumina and aluminum increased, although trade dynamics introduced some noise in the results [1] - The company is not planning to shut down any refining capacity, as its cost position allows it to operate in a low-price environment despite a significant portion of the Chinese market being underwater [7][8] Gallium Investment - Alcoa announced an investment in a facility in Western Australia to extract approximately 10% of the world's gallium, which is currently dominated by China [5] - This investment strengthens relationships with the US, Japanese, and Australian governments, and production is expected to commence by the end of 2026 [6]

Alcoa's Financial Performance - Alcoa reported a slightly smaller than expected adjusted loss and a miss on revenue [1] - Adjusted EBITDA was down 14% versus last quarter [1] Factors Impacting Alcoa's Performance - Increased tariff costs and unfavorable currency impacts are playing a factor [1] - Tariff costs on higher US imports of aluminum from Canada are expected to increase by approximately $50 million sequentially [2] - Trade policy is also impacting guidance [2] Alcoa's Future Prospects - Alcoa has a critical minerals play with gallium that could be in production as early as 2026 [7] - The critical minerals play could be a higher margin business with some pricing power [7] IBM's Performance and AI - IBM met expectations, but people were hoping for more than a meet [4] - Gen AI has been accelerating, but that's still a small part of IBM's business [5] - AI is an important part of the story for many tech names, and if it is not strong or accelerating, it's a problem for the stock [6]

Alcoa Summary - Alcoa reported a slightly smaller than expected adjusted loss, with a revenue miss and adjusted EBITDA down 14% compared to the previous quarter, influenced by increased tariff costs and unfavorable currency impacts [1] - The company anticipates an increase in tariff costs on higher US imports of aluminum from Canada by approximately $50 million sequentially, which is affecting guidance [2] - Alcoa's shares are currently down about 1.5%, reflecting market reactions to the earnings report and broader economic conditions [3] Industry Insights - The industrial sector, including companies like Alcoa, is facing challenges related to critical minerals and commodity pricing, with a focus on cost control and demand fluctuations [6] - Alcoa is exploring opportunities in critical minerals, particularly gallium, which could lead to higher margins and pricing power, with potential production increases as early as 2026 [7]

Financial Performance - Alcoa reported 3Q25 Earnings Per Share (EPS) of $0.88, but an Adjusted EPS of $(0.02)[18] - The company recorded a $786 million gain on the sale of a 25.1% interest in the Ma'aden joint venture[13] - Alcoa announced the permanent closure of the Kwinana refinery, resulting in $895 million of restructuring and related charges[13] - Adjusted EBITDA excluding special items decreased from $313 million in 2Q25 to $270 million in 3Q25, a decrease of $43 million[18] - The company's YTD return on equity is 14.5%, the highest since 2022[25] Production and Shipments - Alumina production for 3Q25 was 7.2 million metric tons (Mmt), with a full-year outlook of 9.5 – 9.7 Mmt[26] - Alumina shipments for 3Q25 were 9.8 Mmt, with a full-year outlook of 13.1 – 13.3 Mmt[26] - Aluminum production for 3Q25 was 1.7 Mmt, with a full-year outlook of 2.3 – 2.5 Mmt[26] - Aluminum shipments for 3Q25 were 1.9 Mmt, with a full-year outlook of 2.5 – 2.6 Mmt[26] Market Dynamics - LME aluminum prices increased by 7% sequentially in 3Q25[36]

Financial Performance - Alcoa reported a quarterly loss of $0.02 per share, missing the analyst estimate of a $0.01 profit [2] - Total quarterly revenue was $2.99 billion, below the Street estimate of $3.13 billion [2][4] - The company's total third-party revenue decreased by 1% sequentially to $3 billion [4] Production and Shipments - Alumina production increased by 4% sequentially to 2.5 million metric tons [3] - Aluminum production increased by 1% sequentially to 579,000 metric tons [3] - Third-party shipments of alumina were flat sequentially at 2.2 million metric tons, while total shipments in Aluminum decreased by 3% sequentially [3] Segment Performance - In the Alumina segment, third-party revenue decreased by 9% [4] - In the Aluminum segment, third-party revenue increased by 4% [4] Future Outlook - The company plans to focus on safety, stability, and continuous improvement to enhance overall profitability in the fourth quarter [5] - There is an ongoing effort to progress Australia mine approvals [5]

Higher tariff costs on imported aluminum weighed somewhat on third-quarter income, the company said. ...

Financial Performance - Alcoa reported third-quarter 2025 revenue of $2.995 billion, a decrease of 1% sequentially from $3.018 billion in Q2 2025[3]. - Net income attributable to Alcoa Corporation was $232 million, or $0.88 per share, compared to $164 million and $0.62 per share in Q2 2025[3]. - Alcoa Corporation reported Q3 2025 sales of $2,995 million, a slight decrease from $3,018 million in Q2 2025 but an increase from $2,904 million in Q3 2024[23]. - The net income attributable to Alcoa for Q3 2025 was $232 million, up from $164 million in Q2 2025 and significantly higher than $90 million in Q3 2024[23]. - For the nine months ended September 30, 2025, Alcoa's sales reached $9,382 million, compared to $8,409 million for the same period in 2024, reflecting a year-over-year growth of 11.5%[24]. - Alcoa's net income for the nine months ended September 30, 2025, was $944 million, a significant recovery from a net loss of $142 million in the same period of 2024[24]. - Alcoa's earnings per share for Q3 2025 were $0.88, compared to $0.63 in Q2 2025 and $0.39 in Q3 2024, reflecting strong profitability growth[23]. Production and Operations - Alumina production increased by 4% sequentially to 2.5 million metric tons, while aluminum production rose by 1% to 579,000 metric tons[8]. - The company expects 2025 total alumina production to remain between 9.5 to 9.7 million metric tons, unchanged from prior projections[10]. - For the fourth quarter 2025, Alcoa anticipates unfavorable impacts of approximately $20 million due to restart inefficiencies at the San Ciprián smelter[12]. - Alcoa is advancing the development of a gallium plant at the Wagerup refinery in Australia with support from U.S. and Australian governments[4]. - The company plans to submit responses to the Western Australian Environmental Protection Authority regarding mining activities in Australia in Q4 2025[4]. Costs and Expenses - Adjusted EBITDA excluding special items was $270 million, down $43 million sequentially due to increased tariff costs and lower alumina prices[3]. - The total costs and expenses for Q3 2025 were $2,828 million, slightly lower than $2,857 million in Q2 2025 and higher than $2,720 million in Q3 2024[23]. - The company incurred restructuring and other charges of $885 million in Q3 2025, a notable increase from $14 million in Q2 2025 and $30 million in Q3 2024[23]. - Alcoa's operational tax expense for Q4 2025 is expected to be approximately $40 million to $50 million, subject to market conditions[13]. Cash Flow and Debt - Alcoa ended Q3 2025 with a cash balance of $1.5 billion, including the full repayment of a $74 million term loan[4]. - Alcoa's cash and cash equivalents increased to $1,485 million as of September 30, 2025, up from $1,138 million at the end of 2024[26]. - Total debt as of September 30, 2025, was $2,581 million, slightly down from $2,595 million as of December 31, 2024[37]. - Net debt as of September 30, 2025, was $1,096 million, compared to $1,457 million as of December 31, 2024[37]. - Free cash flow for the quarter ended September 30, 2025, was $(66) million, a decrease from $357 million in the previous quarter and $(3) million in the same quarter last year[36]. Assets and Working Capital - The company reported a total asset value of $15,969 million as of September 30, 2025, compared to $14,064 million at the end of 2024, indicating a growth of 13.5%[26]. - DWC working capital for the quarter ended September 30, 2025, was $1,618 million, an increase from $1,566 million in the previous quarter and $1,414 million in the same quarter last year[40]. - Days working capital for the quarter ended September 30, 2025, was 50 days, compared to 47 days in the previous quarter and 45 days in the same quarter last year[40]. Other Notable Items - The company reported a gain on the sale of interest in the Ma'aden joint venture of $786 million for the quarter ended September 30, 2025[32]. - Costs related to the closure of the Kwinana, Australia refinery amounted to $39 million for the quarter ended September 30, 2025[35]. - The company recognized a net benefit for discrete tax items of $5 million for the quarter ended September 30, 2025[32]. - Research and development expenses for Q3 2025 were $11 million, down from $12 million in Q2 2025 and $16 million in Q3 2024[23].