[Q2 2024 Financial Highlights](index=1&type=section&id=Alcoa%20Corporation%20Reports%20Second%20Quarter%202024%20Results) Alcoa reported significantly improved second-quarter 2024 results, driven by higher prices and profitability programs, with the Alumina Limited acquisition nearing completion [Financial Results and Highlights](index=1&type=section&id=Financial%20Results%20and%20Highlights) Alcoa reported significantly improved second-quarter 2024 results, with sequential increases in revenue, net income, and Adjusted EBITDA, driven by higher alumina and aluminum prices, alongside progress in profitability programs, and is nearing the completion of its acquisition of Alumina Limited Q2 2024 Key Financial Metrics (in millions, except per share amounts) | M, except per share amounts | 2Q24 | 1Q24 | 2Q23 | | :--- | :--- | :--- | :--- | | Revenue | $2,906 | $2,599 | $2,684 | | Net income (loss) attributable to Alcoa Corporation | $20 | $(252) | $(102) | | Income (loss) per share attributable to Alcoa Corporation | $0.11 | $(1.41) | $(0.57) | | Adjusted net income (loss) | $30 | $(145) | $(62) | | Adjusted income (loss) per share | $0.16 | $(0.81) | $(0.35) | | Adjusted EBITDA excluding special items | $325 | $132 | $137 | - Revenue increased **12% sequentially to $2.9 billion**, primarily due to higher alumina and aluminum prices[3](index=3&type=chunk) - Adjusted EBITDA excluding special items more than doubled sequentially, increasing to **$325 million** from **$132 million** in Q1 2024[4](index=4&type=chunk) - The acquisition of Alumina Limited is expected to close on or about August 1, 2024[4](index=4&type=chunk) - The company finished the second quarter with a cash balance of **$1.4 billion** and paid a quarterly dividend of **$0.10 per share**[4](index=4&type=chunk) [Detailed Financial and Operational Review](index=2&type=section&id=Detailed%20Financial%20and%20Operational%20Review) This section provides an in-depth analysis of Alcoa's second-quarter financial and operational performance, strategic initiatives, and the full-year 2024 outlook [Second Quarter 2024 Results Analysis](index=2&type=section&id=Second%20Quarter%202024%20Results) The company's Q2 performance reflects strong pricing in both Alumina and Aluminum segments, driving a 12% sequential revenue increase, with net income turning positive to $20 million, benefiting from the non-recurrence of a significant Q1 charge related to the Kwinana refinery curtailment, while strategic initiatives are progressing on schedule [Financial Performance](index=2&type=section&id=Financial%20Performance) Revenue grew to $2.9 billion, with a 5% increase in Alumina and a 16% increase in Aluminum third-party revenue, driven by 7% and 9% price increases, respectively, while net income of $20 million marked a significant turnaround from a $252 million loss in Q1, largely due to the absence of the prior quarter's $197 million Kwinana curtailment charge, and Adjusted EBITDA surged by $193 million sequentially to $325 million, with the company generating $123 million in free cash flow and ending the quarter with a $1.4 billion cash balance - Total third-party revenue increased **12% sequentially to $2.9 billion**, with Alumina segment revenue rising **5%** on a **7% price increase**, and Aluminum segment revenue rising **16%** on a **9% price increase** and higher shipments[7](index=7&type=chunk) - Net income improved to **$20 million**, reflecting higher prices and the non-recurrence of a **$197 million charge** in Q1 2024 for the Kwinana refinery curtailment[7](index=7&type=chunk) - Adjusted EBITDA increased by **$193 million sequentially to $325 million**, primarily due to higher prices and lower production costs, partially offset by higher energy costs[7](index=7&type=chunk) - The company ended the quarter with **$1.4 billion in cash**, generating **$287 million in cash from operations** and **$123 million in free cash flow**[7](index=7&type=chunk) [Operational Performance](index=2&type=section&id=Operational%20Performance) Alumina production decreased by 5% sequentially to 2.53 million metric tons, a direct result of the completed Kwinana refinery curtailment, while aluminum production rose for the seventh consecutive quarter to 543,000 metric tons, and total aluminum shipments increased by 7% sequentially Q2 2024 Production & Shipments | Segment | Metric | Value (kmt) | Sequential Change | | :--- | :--- | :--- | :--- | | Alumina | Production | 2,530 | -5% | | Alumina | 3rd Party Shipments | - | -5% | | Aluminum | Production | 543 | Increased (7th consecutive quarter) | | Aluminum | Total Shipments | - | +7% | [Strategic Initiatives and Key Actions](index=2&type=section&id=Strategic%20Initiatives%20and%20Key%20Actions) Alcoa is advancing several key strategic goals, with the acquisition of Alumina Limited set to close around August 1, 2024, the full curtailment of the Kwinana refinery completed in June as planned, and the company's profitability improvement program on track, having achieved $350 million of its $645 million year-end 2025 target - The acquisition of Alumina Limited is expected to be completed on or about August 1, 2024, with all regulatory approvals received[7](index=7&type=chunk) - The full curtailment of the Kwinana refinery in Australia was completed in June 2024 as planned[7](index=7&type=chunk) - Profitability improvement programs are projected to achieve **$350 million** of the **$645 million target** by year-end 2025, indicating the company is on track[7](index=7&type=chunk) - Regarding the San Ciprián complex, Alcoa continues to seek competitive energy solutions and progress a potential sale, but anticipates available funding will be exhausted by the end of 2024[7](index=7&type=chunk) [2024 Outlook](index=3&type=section&id=2024%20Outlook) Alcoa reaffirmed its full-year 2024 production and shipment guidance for both the Alumina and Aluminum segments, and for the third quarter, the company anticipates specific financial impacts, including unfavorable bauxite grade effects in Alumina, favorable raw material prices in Aluminum, increased interest expense following the Alumina Limited acquisition, and an operational tax expense of $60 to $70 million Full Year 2024 Shipment & Production Outlook | Segment | Metric | Range (million metric tons) | | :--- | :--- | :--- | | Alumina | Production | 9.8 - 10.0 | | Alumina | Shipments | 12.7 - 12.9 | | Aluminum | Production | 2.2 - 2.3 | | Aluminum | Shipments | 2.5 - 2.6 | - For Q3 2024, Alumina Segment Adjusted EBITDA is expected to see an unfavorable impact of **$10 million** due to bauxite grade in Australia[10](index=10&type=chunk) - For Q3 2024, Aluminum Segment Adjusted EBITDA is expected to see a favorable impact of **$10 million** from raw material prices[10](index=10&type=chunk) - Q3 2024 interest expense is expected to increase by approximately **$5 million** due to the assumption of Alumina Limited debt[11](index=11&type=chunk) - Third quarter operational tax expense is expected to be between **$60 million and $70 million**[11](index=11&type=chunk) [Consolidated Financial Statements](index=6&type=section&id=Consolidated%20Financial%20Statements) This section presents Alcoa's consolidated financial statements, including the statement of operations, balance sheet, and cash flows [Statement of Consolidated Operations](index=6&type=section&id=Statement%20of%20Consolidated%20Operations) For the second quarter of 2024, Alcoa reported sales of $2.906 billion and net income attributable to the company of $20 million, or $0.11 per diluted share, representing a significant improvement from a net loss of $252 million in Q1 2024 and a net loss of $102 million in Q2 2023, with the company posting a net loss of $232 million for the six months ended June 30, 2024 Quarterly Statement of Operations Highlights (in millions) | Line Item | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Sales | $2,906 | $2,599 | $2,684 | | Income (loss) before income taxes | $92 | $(325) | $(99) | | Net income (loss) attributable to Alcoa | $20 | $(252) | $(102) | | Diluted EPS | $0.11 | $(1.41) | $(0.57) | Six-Month Statement of Operations Highlights (in millions) | Line Item | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Sales | $5,505 | $5,354 | | Loss before income taxes | $(233) | $(279) | | Net loss attributable to Alcoa | $(232) | $(333) | | Diluted EPS | $(1.29) | $(1.87) | [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) As of June 30, 2024, Alcoa's balance sheet showed total assets of $14.307 billion and total liabilities of $8.891 billion, with cash and cash equivalents increasing significantly to $1.396 billion from $944 million at year-end 2023, while long-term debt also increased, contributing to a rise in total liabilities Key Balance Sheet Items (in millions) | Account | June 30, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash and cash equivalents | $1,396 | $944 | | Total current assets | $4,903 | $4,405 | | Total assets | $14,307 | $14,155 | | Total current liabilities | $3,166 | $3,030 | | Long-term debt | $2,469 | $1,732 | | Total liabilities | $8,891 | $8,310 | | Total equity | $5,416 | $5,845 | [Statement of Consolidated Cash Flows](index=9&type=section&id=Statement%20of%20Consolidated%20Cash%20Flows) For the first six months of 2024, Alcoa generated $64 million in cash from operations, a notable improvement from the $176 million used in the same period of 2023, with cash used for investing activities at $281 million, primarily for capital expenditures, and financing activities providing $679 million, largely from new debt issuance, resulting in a net increase in cash of $446 million for the period Six-Month Cash Flow Summary (in millions) | Cash Flow Category | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | | :--- | :--- | :--- | | Cash Provided From (Used For) Operations | $64 | $(176) | | Cash Used For Investing Activities | $(281) | $(222) | | Cash Provided From Financing Activities | $679 | $16 | | Net Change in Cash | $446 | $(377) | [Segment Information](index=10&type=section&id=Segment%20Information) This section details the financial and operational performance of Alcoa's Alumina and Aluminum segments [Segment Performance](index=10&type=section&id=Segment%20Performance) In Q2 2024, the Alumina segment's Adjusted EBITDA rose to $186 million from $139 million in Q1, benefiting from a higher average realized price of $399 per metric ton, while the Aluminum segment showed a more dramatic improvement, with Adjusted EBITDA jumping to $233 million from $50 million in Q1, driven by a significant increase in the average realized price to $2,858 per metric ton Alumina Segment Key Metrics | Metric | 2Q24 | 1Q24 | | :--- | :--- | :--- | | Alumina production (kmt) | 2,539 | 2,670 | | Third-party alumina shipments (kmt) | 2,267 | 2,397 | | Average realized third-party price per mt | $399 | $372 | | Segment Adjusted EBITDA (M) | $186 | $139 | Aluminum Segment Key Metrics | Metric | 2Q24 | 1Q24 | | :--- | :--- | :--- | | Aluminum production (kmt) | 543 | 542 | | Total aluminum shipments (kmt) | 677 | 634 | | Average realized third-party price per mt | $2,858 | $2,620 | | Segment Adjusted EBITDA (M) | $233 | $50 | [Non-GAAP Financial Measures and Reconciliations](index=11&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Reconciliations) This section provides reconciliations for Alcoa's non-GAAP financial measures, including Adjusted Income, Adjusted EPS, Adjusted EBITDA, Free Cash Flow, Net Debt, and Working Capital [Adjusted Income and Adjusted EPS](index=11&type=section&id=Adjusted%20Income%20and%20Adjusted%20EPS) Alcoa's Q2 2024 adjusted net income was $30 million, or $0.16 per diluted share, a non-GAAP measure derived by adjusting the GAAP net income of $20 million for $10 million in net special items, which included restructuring charges, mark-to-market gains on energy derivatives, and costs related to portfolio actions Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (in millions) | Description | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Alcoa (GAAP) | $20 | $(252) | $(102) | | Special items (subtotal) | $10 | $107 | $40 | | **Net income (loss) attributable to Alcoa – as adjusted** | **$30** | **$(145)** | **$(62)** | [Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) The company reported Adjusted EBITDA excluding special items of $325 million for Q2 2024, calculated by taking the GAAP net income attributable to Alcoa ($20 million) and adding back items such as taxes, interest, D&A, and restructuring charges, then adjusting for $34 million in special items Reconciliation to Adjusted EBITDA, excluding special items (in millions) | Description | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | Net income (loss) attributable to Alcoa (GAAP) | $20 | $(252) | $(102) | | Add back various items (NCI, Taxes, Interest, etc.) | $253 | $395 | $183 | | Adjusted EBITDA | $291 | $124 | $111 | | Special items | $34 | $8 | $26 | | **Adjusted EBITDA, excluding special items** | **$325** | **$132** | **$137** | [Free Cash Flow and Net Debt](index=13&type=section&id=Free%20Cash%20Flow%20and%20Net%20Debt) Alcoa generated $123 million in free cash flow during Q2 2024, a significant positive swing from the $324 million used in Q1 2024, and as of June 30, 2024, the company's net debt stood at $1.183 billion, an increase from $923 million at the end of 2023, reflecting higher total debt levels Free Cash Flow Calculation (in millions) | Description | Q2 2024 | Q1 2024 | | :--- | :--- | :--- | | Cash provided from (used for) operations | $287 | $(223) | | Capital expenditures | $(164) | $(101) | | **Free cash flow** | **$123** | **$(324)** | Net Debt Calculation (in millions) | Description | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total debt | $2,579 | $1,867 | | Less: Cash and cash equivalents | $1,396 | $944 | | **Net debt** | **$1,183** | **$923** | [Working Capital](index=14&type=section&id=Working%20Capital) The company's liquidity management efficiency improved in Q2 2024, as evidenced by a reduction in Days Working Capital (DWC) to 41 days from 47 days in the previous quarter, primarily due to better inventory management Days Working Capital (DWC) | Metric | Q2 2024 | Q1 2024 | Q2 2023 | | :--- | :--- | :--- | :--- | | DWC working capital (M) | $1,295 | $1,331 | $1,611 | | **Days working capital** | **41** | **47** | **55** |

Market Overview - Pre-market futures are down, indicating a mass realization of historically high market levels, with the Dow hitting an all-time closing high recently [1] - The Dow is down 120 points, S&P 500 down 56 points, Nasdaq down 300 points, and Russell 2000 down 17 points, but no significant correction is observed at current levels [1] Housing Market - Housing Starts for June show a bounce back to 1.352 million seasonally adjusted, annualized units, up from 1.314 million, which remains at multi-year lows [1] - Building Permits are at 1.446 million seasonally adjusted, annualized units, surpassing the expected 1.40 million and the revised May figure of 1.399 million [2] - Multi-family units led gains in Housing Starts with a 22% month-over-month increase, while Single-family units decreased by 2.2% [3] - Developers are pulling back on Multi-family developments due to sufficient supply, while Single-family homes are in short supply as current homeowners are reluctant to sell [3] Company Earnings - Johnson & Johnson (JNJ) reported Q2 earnings of $2.82 per share, beating expectations by 4%, with revenues of $22.45 billion exceeding the Zacks consensus by 0.45% [4] - Despite the earnings beat, JNJ shares are only modestly up on a down trading day, not significantly impacting the year-to-date selloff of 3% [4] - Upcoming Q2 earnings results include United Airlines (UAL) and Alcoa (AA), with expectations for continued positive performance following strong results from major Wall Street banks [4]

Loading...Loading...Alcoa Corporation AA will release its second quarter financial results, after the closing bell on Wednesday, July 17.Analysts expect the Pittsburgh, Pennsylvania-based company to report quarterly earnings at 6 cents per share, versus a year-ago loss of 35 cents per share in the year-ago period. Alcoa is expected to post revenue of $2.84 billion, compared to $2.69 billion a year earlier, according to data from Benzinga Pro.On Tuesday, Alcoa announced stockholder approval related to propos ...

Core Viewpoint - Alcoa (AA) has received an upgrade to a Zacks Rank 2 (Buy) due to a significant upward trend in earnings estimates, which is a strong indicator of potential stock price movement [1][2]. Earnings Outlook - The Zacks rating upgrade reflects a positive outlook on Alcoa's earnings, suggesting that this could lead to favorable stock price movements [2]. - For the fiscal year ending December 2024, Alcoa is expected to earn $2.20 per share, representing a 196.9% increase from the previous year's reported figure [5]. Earnings Estimate Revisions - Over the past three months, the Zacks Consensus Estimate for Alcoa has surged by 570.2%, indicating a strong upward revision trend in earnings estimates [5]. - The correlation between earnings estimate revisions and near-term stock movements is emphasized, with institutional investors often reacting to these changes, which can lead to significant price movements [3][4]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 20% of stocks receiving a 'Strong Buy' or 'Buy' rating, indicating superior earnings estimate revision characteristics [6][7]. - Alcoa's upgrade to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [7].

Group 1 - Alcoa (AA) is a notable stock in the Industrial Products sector, currently ranked 4 among 218 individual stocks [1] - The Zacks Rank system indicates that Alcoa has a Zacks Rank of 2 (Buy), reflecting a positive earnings outlook [2] - Alcoa's year-to-date performance shows a return of 15.6%, outperforming the sector average of 7% [2] - The Zacks Consensus Estimate for Alcoa's full-year earnings has increased by 570.2% over the past quarter, indicating improved analyst sentiment [2] - Alcoa belongs to the Metal Products - Distribution industry, which has gained an average of 9.5% year-to-date, outperforming its industry peers [3] Group 2 - Chart Industries (GTLS) is another strong performer in the Industrial Products sector, with a year-to-date return of 18.2% [2] - Chart Industries has a Zacks Rank of 2 (Buy), with a consensus EPS estimate increase of 1.3% over the past three months [3] - Chart Industries is part of the Manufacturing - General Industrial industry, which has a year-to-date return of 7.4% and is currently ranked 49 [3]

Core Insights - Alcoa (AA) is expected to report a quarterly loss of $0.02 per share, a 94.3% increase in loss compared to the previous year, with revenues forecasted at $2.87 billion, reflecting a 7% year-over-year increase [1] - The consensus EPS estimate has been revised upward by 70.2% over the past 30 days, indicating a significant reassessment by analysts [1] Revenue and Sales Projections - Analysts project 'Total sales- Alumina' to be $1.37 billion, a 6% increase from the year-ago quarter [2] - 'Total sales- Aluminum' is expected to reach $1.92 billion, indicating a year-over-year change of +7.3% [2] - 'Third-party sales- Bauxite' is forecasted at $110.07 million, showing a decline of 2.6% year-over-year [2] Price and Shipment Estimates - The average realized third-party price per metric ton of alumina is projected at $382.24, up from $363 in the same quarter last year [3] - The average realized third-party price per metric ton of aluminum is expected to be $3,011.18, compared to $2,924 in the previous year [3] - 'Third-party alumina shipments' are estimated to reach 2,281.06 Kmt, an increase from 2,136 Kmt year-over-year [3] - 'Third-party aluminum shipments' are projected at 633.80 Kmt, up from 623 Kmt in the same period last year [3] Production Estimates - 'Alumina production' is expected to be 2,534.13 Kmt, slightly down from 2,559 Kmt in the same quarter last year [4] - 'Aluminum production' is forecasted at 545.52 Kmt, an increase from 523 Kmt year-over-year [4] - 'Bauxite production' is estimated at 10.10 Mmt, compared to 10 Mmt in the previous year [4] - 'Third-party bauxite shipments' are projected to be 1,732.62 Mmt, down from 1,800 Mmt year-over-year [4] Stock Performance - Alcoa shares have changed by +1.7% over the past month, compared to a +4.3% move in the Zacks S&P 500 composite [5] - The company holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [5]

Nandani Bridglal Shares of aluminum giant Alcoa Corporation (NYSE:AA) rose by over 2% in early trading on July 11th. This came after the company announced, following the close of business on July 10th, preliminary financial results covering the second quarter of the company's 2024 fiscal year. Although management has only provided a snippet of data covering that time, it is clear that the financial picture is better, not only on a year-over-year basis, but also better than what analysts anticipated. Tho ...

Core Viewpoint - Alcoa Corp's stock has experienced a decline of 3.8%, trading at $38.78, marking its third consecutive daily loss after a rally in early July that peaked at $43 [1] Group 1: Stock Performance - Alcoa's stock has dropped 8.3% this week and is approaching its +10% year-over-year level [1] - The stock is currently near a historically bullish trendline, which could indicate potential for recovery [1] Group 2: Technical Analysis - The stock's recent drawdown has placed it within one standard deviation of its 80-day moving average [1] - Historical data shows that after four similar signals in the past three years, the stock was higher after half of these occurrences, averaging a 9.1% gain over one month [1] Group 3: Short Interest and Analyst Sentiment - An increase in short interest of 2.4% in the last two reporting periods has resulted in 12.77 million shares sold short, representing 7.2% of the stock's available float [2] - Among the 10 analysts covering Alcoa, six have rated the stock as a "hold" or worse, indicating a potential sentiment shift that could impact stock performance [2]

Core Viewpoint - Alcoa (AA) is anticipated to report a year-over-year increase in earnings driven by higher revenues, with the earnings report set for July 17, 2024, being a significant factor for its stock price movement [1][2]. Revenue and Earnings Estimates - The company is expected to post a quarterly loss of $0.02 per share, reflecting a year-over-year change of +94.3% [2]. - Revenues are projected to reach $2.82 billion, marking a 5.2% increase from the same quarter last year [2]. Estimate Revisions Trend - The consensus EPS estimate has been revised 70.19% higher in the last 30 days, indicating a reassessment by analysts [3]. - The direction of estimate revisions may not always align with the aggregate change, highlighting the variability in analyst expectations [3]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that the Most Accurate Estimate aligns with the Zacks Consensus Estimate, resulting in an Earnings ESP of 0% for Alcoa [4][6]. - The stock currently holds a Zacks Rank of 3, suggesting a neutral outlook [6]. Historical Performance - In the last reported quarter, Alcoa was expected to post a loss of $0.62 per share but actually reported a loss of $0.81, resulting in a surprise of -30.65% [8]. - Over the past four quarters, Alcoa has beaten consensus EPS estimates twice [8]. Conclusion - Alcoa does not appear to be a strong candidate for an earnings beat based on current estimates and historical performance, but other factors should also be considered when evaluating the stock ahead of its earnings release [9].

As the global economy faces numerous headwinds, including fluctuating commodity prices and economic uncertainty, certain materials stocks are increasingly risky investments. Here are three materials stocks to sell to reduce exposure to this market cyclicality.A number of headwinds are battering these materials stocks. Persistent inflationary pressures have led to elevated interest rates, which have a twofold impact on materials stocks. Higher rates increase borrowing costs for companies, squeezing profit ma ...