Group 1 - The core point of the article is that U.S. aluminum companies are facing increased costs due to tariffs imposed by the Trump administration, specifically citing a cost increase of $115 million [1] Group 2 - The article highlights the direct financial impact of tariffs on the aluminum industry, indicating that the tariffs have significantly raised operational costs for companies in this sector [1]

Now you can get access to the latest and highest-quality analysis of recent Wall Street buying and selling ideas with just one subscription to Beyond the Wall Investing ! There is a free trial and a special discount of 10% for you. Join us today!My first (and so far the only) article covering Alcoa Corporation ( AA ) stock came out in late February 2024 with a "hold" rating. At the time, I argued that the Wall Street consensus figures that were priced in back thenDaniel Sereda is chief investment analyst at ...

Financial Data and Key Metrics Changes - Revenue decreased by 10% sequentially to $3 billion, with net income attributable to Alcoa at $164 million compared to $548 million in the prior quarter, resulting in earnings per share of $0.62 [10][11] - Adjusted EBITDA was $313 million, down $542 million sequentially, primarily due to lower alumina and aluminum prices and increased U.S. Section 232 tariff costs [11][12] - Year-to-date return on equity was positive at 22.5%, with cash flow from operations providing $488 million [15][14] Business Line Data and Key Metrics Changes - In the Alumina segment, third-party revenue decreased by 28% due to lower average realized prices, partially offset by increased shipments [10] - The Aluminum segment saw a 3% increase in third-party revenue due to increased shipments and favorable currency impacts, despite a decrease in average realized prices [10][11] - Adjusted EBITDA for the Alumina segment decreased by $525 million, while the Aluminum segment's adjusted EBITDA decreased by $37 million, impacted by U.S. Section 232 tariff costs [12][13] Market Data and Key Metrics Changes - Alumina prices rebounded somewhat after a sharp decline, with over 80% of Chinese refineries operating at a deficit due to high bauxite prices [27] - U.S. Midwest premium increased to $0.68 per pound but remains below the estimated $0.75 needed to fully offset tariff costs [30][55] - Demand conditions remain steady in Europe and North America, with mixed sector performance; electrical and packaging sectors are performing well, while automotive is affected by tariff-related uncertainty [32] Company Strategy and Development Direction - The company is focused on executing its 2025 priorities, enhancing operational competitiveness, and navigating market dynamics to deliver long-term value [36] - Alcoa is advocating for trade policies that support both the company and the broader U.S. aluminum industry, while also redirecting Canadian production to non-U.S. customers to mitigate tariff impacts [9][77] - The long-term demand forecast for aluminum remains robust, driven by megatrends in transportation, construction, packaging, and electrical sectors [23][24] Management's Comments on Operating Environment and Future Outlook - Management noted that while tariffs create near-term volatility, the broader outlook for aluminum demand remains strong, supported by global megatrends [23][26] - The company expects aluminum shipments to be adjusted to 2.5 to 2.6 million metric tons for the year, down from an initial estimate of 2.6 to 2.8 million metric tons due to disruptions at the San Ciprian smelter [16] - Management expressed confidence in navigating the challenges posed by tariffs and market dynamics, with plans to continue engaging with policymakers [8][77] Other Important Information - The company successfully concluded a five-year tax dispute in Australia with a favorable ruling, affirming no additional tax owed [7] - Alcoa's cash position at the end of the quarter was $1.5 billion, with plans to use proceeds from the sale of its stake in the Mauden joint ventures to pay related taxes and transaction fees [14][15] - The company is progressing with approvals for new mine regions in Western Australia, although timelines have been extended due to the complexity of the process [34][36] Q&A Session Summary Question: Impact of potential 50% tariffs on Brazil - Management indicated that the impact depends on whether alumina is excluded from the tariffs, with options to source from Western Australia if necessary [40][41] Question: Contingency plans for Western Australia - Management stated that no cost impact is anticipated for 2025 or 2026, with contingency plans in place to manage delays [42][46] Question: Tariff costs and Midwest premium offset - Management clarified that the second quarter tariff costs were approximately $115 million, with a Midwest premium uptick of about $60 million, resulting in margin compression [50][51] Question: San Ciprian cash burn expectations for 2026 - Management noted that while the smelter is expected to be profitable post-ramp-up, the refinery will likely incur losses [60][62] Question: Restarting spare capacity at Warrick - Management explained that restarting the fourth line at Warrick requires significant investment and time, making it contingent on tariff stability [68][70] Question: Discussions with the government regarding tariffs - Management emphasized ongoing advocacy efforts to educate the government on the aluminum market's tightness and the importance of U.S.-Canada supply chains [116][120] Question: Capital management and debt reduction - Management indicated progress in reducing net debt, with plans to evaluate capital allocation priorities once the target range is reached [120][121]

Financial Data and Key Metrics Changes - Revenue decreased by 10% sequentially to $3 billion [11] - Net income attributable to Alcoa was $164 million, down from $548 million in the prior quarter, with earnings per share decreasing to $0.62 [12] - Adjusted EBITDA was $313 million, reflecting a sequential decrease of $542 million primarily due to lower alumina and aluminum prices [12][14] - Year-to-date return on equity was positive at 22.5% [16] Business Line Data and Key Metrics Changes - In the Alumina segment, third-party revenue decreased by 28% due to lower average realized prices, partially offset by increased shipments [11] - In the Aluminum segment, third-party revenue increased by 3% due to increased shipments and favorable currency impacts, despite a decrease in average realized prices [11][14] Market Data and Key Metrics Changes - Alumina prices rebounded somewhat after a sharp decline in the first quarter, with production cuts in China contributing to a more balanced market [29] - The U.S. Midwest premium increased to $0.68 per pound but remains below analyst estimates needed to fully offset tariff costs [32] - Demand conditions remain steady in Europe and North America, with mixed sector performance [34] Company Strategy and Development Direction - The company is focused on executing its 2025 priorities, enhancing operational competitiveness, and navigating market dynamics to deliver long-term value [40] - Alcoa is advocating for trade policies that support both the company and the broader U.S. aluminum industry [10] - The company is progressing approvals for new mine regions in Western Australia, although timelines have been extended [36][38] Management's Comments on Operating Environment and Future Outlook - Management noted that while tariffs create near-term volatility, the broader outlook for aluminum demand remains robust, driven by megatrends in transportation, construction, and packaging [24][28] - The company expects to adjust its annual outlook for aluminum shipments due to reduced shipments from the San Ciprian smelter [17] Other Important Information - The company successfully concluded a five-year tax dispute in Australia with a favorable ruling [8] - Cash from operations was positive, providing $488 million, with a working capital release of $251 million [15] - The company ended the quarter with cash of $1.5 billion [15] Q&A Session Summary Question: Impact of potential 50% tariffs on Brazil - Management indicated that the impact depends on whether alumina is excluded from tariffs, with options to source from Western Australia if necessary [42][43] Question: Contingency plans for Western Australia - Management stated that they do not anticipate any cost impact in 2025 or 2026, with contingency plans in place for mining deeper in current pits [44] Question: Tariff costs and Midwest premium - Management clarified that the second quarter tariff costs were approximately $115 million, with a Midwest premium uptick of about $60 million, leading to margin compression [52][56] Question: San Ciprian smelter cash burn expectations - Management noted that while the smelter is expected to be profitable after full ramp-up, the refinery will struggle and move into a loss position for the rest of the year [64][66] Question: Restarting spare capacity at Warrick - Management explained that restarting the fourth line at Warrick would require significant investment and time, with current operations focused on three lines [71][72] Question: Discussions with the government regarding tariffs - Management emphasized ongoing advocacy efforts to educate the government on the aluminum market's tightness and the importance of Canadian supply chains [120] Question: Capital management and debt reduction - Management indicated that they are nearing the high end of their adjusted net debt target and will consider capital allocation priorities once that target is reached [124]

Financial Performance - Alcoa reported 2Q25 Earnings Per Share (EPS) of $0.62 and Adjusted EPS of $0.39[22] - Adjusted EBITDA excluding special items decreased from $855 million in 1Q25 to $313 million in 2Q25, a decrease of $542 million[22] - Net income attributable to Alcoa Corporation decreased from $548 million in 1Q25 to $164 million in 2Q25, a decrease of $384 million[22] - Adjusted net income attributable to Alcoa Corporation decreased from $568 million in 1Q25 to $103 million in 2Q25, a decrease of $465 million[22] - The company's YTD capital returns to stockholders totaled $53 million[29] - The company's 2Q25 cash balance was $15 billion[29] Market Dynamics - Realized primary aluminum price decreased from $3,213 per metric ton in 1Q25 to $3,143 per metric ton in 2Q25, a decrease of $70 per metric ton[22] - Realized alumina price decreased significantly from $575 per metric ton in 1Q25 to $378 per metric ton in 2Q25, a decrease of $197 per metric ton[22] - Tariffs negatively impacted Adjusted EBITDA by $95 million in 2Q25[24] - The final sale of Ma'aden was valued at $135 billion, with shares valued at $12 billion[17] Production and Shipments - Alumina production for YTD 2Q25 was 47 million metric tons, with a FY25 outlook of 95 – 97 million metric tons[30] - Alumina shipments for YTD 2Q25 were 65 million metric tons, with a FY25 outlook of 131 – 133 million metric tons[30] - Aluminum production for YTD 2Q25 was 11 million metric tons, with a FY25 outlook of 23 – 25 million metric tons[30] - Aluminum shipments for YTD 2Q25 were 12 million metric tons, with a FY25 outlook of 25 – 26 million metric tons[30]

Exhibit 99.1 Alcoa Corporation Reports Second Quarter 2025 Results PITTSBURGH--(BUSINESS WIRE)--July 16, 2025--Alcoa Corporation (NYSE: AA; ASX: AAI) today reported results for the second quarter 2025 that reflect strong operational performance, and a sequential increase in cash despite lower prices for alumina and aluminum and increased tariff costs. Financial Results and Highlights | M, except per share amounts | | 2Q25 | 1Q25 | 2Q24 | | --- | --- | --- | --- | --- | | Revenue | $ | 3,018 $ | 3,369 $ | 2, ...

Core Viewpoint - Alcoa Corporation is expected to report an increase in revenue for the second quarter of 2025, with a consensus estimate of $2.91 billion, reflecting a 0.3% increase from the previous year [1] Revenue Expectations - The Aluminum segment's third-party sales are estimated at $1.96 billion, indicating a 3.2% increase year-over-year, while total sales for the segment are projected at $2.02 billion, a 6.2% rise from the prior year [4] - The Alumina segment's third-party sales are expected to be $836 million, representing an 8.5% decrease from the previous year, with total sales estimated at $1.37 billion, indicating a 6.5% decline [7] Earnings Expectations - The consensus estimate for earnings per share has decreased by 65.5% to 30 cents, although this reflects an 87.5% increase from the same quarter last year [2] Key Factors Influencing Performance - Increased demand for aluminum products in Europe and North America is anticipated to benefit the Aluminum segment, alongside the restart of the San Ciprián smelter and rising aluminum prices [3][10] - Synergistic gains from partnerships, such as the joint venture with IGNIS EQT and the acquisition of Alumina Limited, are expected to enhance revenues [5] - Efforts to increase smelter and refinery capacity are likely to support performance in the upcoming quarter [6] Challenges - The Alumina segment is expected to face challenges due to weakness in the bauxite market in China, influenced by safety and environmental inspections [7] - Global political risks and foreign exchange headwinds, particularly a stronger U.S. dollar, may negatively impact Alcoa's overseas business [8] Earnings Prediction Model - The current model does not predict an earnings beat for Alcoa, as the Earnings ESP stands at 0.00% with both the Most Accurate Estimate and the Zacks Consensus Estimate at 30 cents [9]

Group 1 - The core point of the article is that the stock price of the company, Alcoa Corporation, has dropped by 4.5% due to the delay in the restart of its aluminum smelter in Spain, which is now postponed to mid-2026 [1] Group 2 - The delay in the smelter restart could impact the company's production capacity and revenue projections in the near term [1] - The postponement may also affect the overall aluminum supply chain and market dynamics in the region [1] - Investors may need to reassess their outlook on the company's performance given the extended timeline for operational recovery [1]

Core Viewpoint - Alcoa is expected to report a significant increase in quarterly earnings and revenues, reflecting positive trends in various segments of its business [1][4][10]. Financial Performance - The anticipated earnings per share (EPS) for Alcoa is $0.30, marking an 87.5% increase year-over-year [1]. - Revenue forecasts stand at $2.91 billion, indicating a slight increase of 0.3% compared to the previous year [1]. - The consensus EPS estimate has been revised 4.8% higher in the last 30 days, showing analysts' positive reevaluation [1]. Sales and Production Estimates - Total sales for Aluminum are estimated at $2.02 billion, reflecting a year-over-year increase of 6.2% [4]. - Third-party sales for Bauxite are projected to reach $155.75 million, a significant increase of 62.2% year-over-year [4]. - Third-party sales for Alumina are expected to be $835.75 million, indicating a decrease of 8.6% from the previous year [4]. Price and Shipment Metrics - The average realized third-party price per metric ton of alumina is expected to be $387.55, down from $399.00 year-over-year [5]. - The average realized third-party price per metric ton of aluminum is forecasted at $3047.57, up from $2858.00 in the previous year [6]. - Third-party alumina shipments are estimated at 2,192 thousand metric tons, down from 2,267 thousand metric tons year-over-year [6]. - Third-party aluminum shipments are projected at 638 thousand metric tons, compared to 677 thousand metric tons in the same quarter last year [7]. Production Estimates - Alumina production is expected to reach 2,407 thousand metric tons, down from 2,539 thousand metric tons year-over-year [8]. - Aluminum production is forecasted at 590 thousand metric tons, an increase from 543 thousand metric tons in the same quarter last year [8]. - Bauxite production is estimated to remain stable at 10 million metric tons, unchanged from the previous year [9]. Market Performance - Alcoa shares have increased by 9.4% over the past month, outperforming the Zacks S&P 500 composite, which rose by 4.1% [10].

Company Overview - Alcoa is set to announce its earnings on July 16, 2025, with consensus earnings estimated at approximately $0.51 per share and revenues projected to increase by nearly 2% year-over-year [2] - The company has a current market capitalization of $7.9 billion and reported revenue of $13 billion over the past twelve months, with operating profits of $1.6 billion and net income of $860 million [3] Earnings Expectations - The earnings expectations are influenced by tariff disruptions, mixed performance among business units, and uncertain aluminum demand, slightly offset by strong alumina margins and effective internal cost management [2] - The Alumina segment is expected to remain robust due to steady demand and advantageous cost structures, while the Aluminum segment faces challenges from elevated costs and weak global pricing [2] Historical Performance - Over the last five years, Alcoa has documented 19 earnings data points, with positive one-day (1D) returns observed approximately 32% of the time, which declines to 25% over the last three years [5] - The median of the six positive returns is 3.1%, while the median of the thirteen negative returns is -5.4% [5]