Why Has Alcoa Stock Dropped Post Q4 Results?

Financial Performance - Alcoa reported Q4 2024 sales of $3.49 billion, up from $2.6 billion in Q4 2023, indicating strong financial improvements [1] - The company achieved a net income of $202 million, a turnaround from a net loss of $150 million a year ago [1] - Earnings per share reached $0.77, compared to a loss per share of $0.84 in Q4 2023 [1] - Adjusted EBITDA surged 196% sequentially to $1.6 billion, driven by higher alumina and aluminum prices and lower raw material and energy costs [4] Production Outlook - For 2025, Alcoa expects a slight decline in alumina production due to the curtailment of its Kwinana refinery, while aluminum production is anticipated to rise due to smelter restarts [2] - The company forecasts a $60 million sequential negative impact in Q1 2025 due to seasonal factors and operational changes [2] Stock Performance and Valuation - Alcoa's stock has shown volatility with annual returns of 159% in 2021, -23% in 2022, -24% in 2023, and 12% in 2024, contrasting with the S&P 500 [3] - The company is valued at around $48 per share, approximately 36% above the current market price [4] - Alcoa ended the year with $1.1 billion in cash, and its profitability improvement program exceeded targets, achieving $675 million in improvements over the year [4] Market Drivers - Higher aluminum demand from the automotive, aerospace, and renewable energy sectors is expected to boost revenue [4] - The uncertain macroeconomic environment may pose challenges, but the company remains positive on stock performance due to demand dynamics [4]