Core Insights - Jamalco, a joint venture of Century Aluminum, has resumed production after Hurricane Melissa, with no injuries or material damage reported [1][2] - The company is working with the Government of Jamaica to support affected communities [2] - Century Aluminum does not anticipate a material impact on its financial results from the hurricane [2] Company Overview - Century Aluminum is an integrated producer of bauxite, alumina, and primary aluminum products, and is the largest primary aluminum producer in the United States [3] - The company operates production facilities in Iceland, the Netherlands, and Jamaica [3]

Financial Data and Key Metrics Changes - Revenue decreased 1% sequentially to $3 billion [11] - Net income attributable to Alcoa increased to $232 million from $164 million in the prior quarter, with earnings per share rising to $0.88 [11] - Adjusted EBITDA was $270 million, reflecting a sequential decrease of $43 million primarily due to increased U.S. Section 232 tariff costs and unfavorable currency impacts [12][13] - Cash flow activities showed a cash balance of $1.5 billion at the end of the quarter, with cash used for operations at $85 million [14] Business Line Data and Key Metrics Changes - In the alumina segment, third-party revenue decreased 9% due to lower volumes and bauxite prices [11] - In the aluminum segment, third-party revenue increased 4% driven by higher average realized prices, despite lower shipments [11] - Adjusted EBITDA for the alumina segment decreased by $72 million, while the aluminum segment saw an increase of $210 million due to higher metal prices [12][13] Market Data and Key Metrics Changes - Alumina prices have declined significantly, with recent prices around $315 per metric ton due to ample supply and refinery expansions [18] - LME aluminum prices rose approximately 7% sequentially, reaching $2,775 per metric ton, influenced by a weaker U.S. dollar and persistent supply tightness [20] - The Midwest premium increased, reaching import parity, reflecting declining inventories and reduced aluminum imports [20] Company Strategy and Development Direction - The company is focused on increasing profitability through higher shipments, improved operations, and strategic investments such as the Massena energy contract [10] - A new long-term energy contract for Massena operations was announced, along with a $60 million investment in anode bake furnace [8] - The company is exploring M&A opportunities across its product line, with no specific focus area currently identified [30] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of safety following a tragic incident at the Alumar smelter, reinforcing safety protocols [5] - The outlook for the fourth quarter includes expectations for improved performance in the alumina segment and potential unfavorable impacts in the aluminum segment due to restart inefficiencies [16] - Management noted that while demand remains steady in packaging and electrical sectors, the automotive sector is weak due to tariff uncertainties [21] Other Important Information - The company is progressing with the development of a gallium plant in Australia, supported by funding from the U.S. and Australian governments [7] - The Kwinana Refinery's permanent closure resulted in significant restructuring charges, but the company anticipates recovering closure costs through land sales [12][98] 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 growth options [29][30] Question: U.S.-Australia Alcoa partnership - The partnership was initiated with Japanese entities seeking gallium offtake, providing a supply chain outside of China [34] Question: Canadian-U.S. negotiations regarding aluminum tariffs - Management is providing information to both governments to aid in decision-making regarding trade flows [41] Question: Interest in rolling business - Management confirmed no interest in re-entering the rolling business [57] Question: Gallium project economics and impact on mining permits - The gallium project will not impact ongoing mining permit processes, and the economics are still under negotiation [52] Question: Demand profile and market conditions - Management noted that demand remains stable in certain sectors, with automotive demand being weak, but not indicative of demand destruction [105]

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]

Core Points - Norðurál Grundartangi ehf, a subsidiary of Century Aluminum Company, has temporarily halted production on one of its potlines due to an electrical equipment failure at its aluminum smelter in Iceland [1] - The production at the smelter has been reduced by approximately two-thirds, while the other potline remains fully operational [2] - Century Aluminum expects that losses from this incident will be covered by its property and business interruption insurance policies [3] Company Overview - Century Aluminum is an integrated producer of bauxite, alumina, and primary aluminum products, and is the largest primary aluminum producer in the United States [4]

Core Insights - Alcoa Corporation (AA) is expected to report a 4.1% increase in revenues for Q3 2025, with estimates at $3.02 billion compared to the previous year [1][11] - The company is projected to experience a decline in earnings per share, with a consensus estimate of an adjusted loss of seven cents, reflecting a 112.3% increase from last year's quarterly level [2][11] Revenue and Sales Performance - The Aluminum segment is anticipated to benefit from increased demand for products such as slab, billet, and rod in Europe and North America, with third-party sales estimated at $2.11 billion, indicating a 17% increase from the prior year [3][4] - The Alumina segment, however, is expected to show weakness, with third-party sales projected at $813 million, representing an 18.9% decrease from the previous year [7][11] Strategic Developments - Alcoa's partnerships and acquisitions, including a joint venture with IGNIS EQT and the acquisition of Alumina Limited, are expected to enhance revenue streams [5] - Efforts to increase smelter and refinery capacity are likely to support performance in the upcoming quarter [6] Market Conditions - The company faces challenges in the Alumina segment due to a weak bauxite market 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 operations [8]

Core Points - Century Aluminum Company has extended its power agreement with Santee Cooper to ensure a stable power supply for its Mt. Holly smelter until 2031, facilitating the restart of idle capacity [1][2] - The company plans to invest $50 million to restart idle capacity, which will increase production by 50,000 metric tons and boost overall U.S. aluminum output by 10 percent [3] - The expansion is expected to create over 100 new jobs and allow the plant to operate at full capacity by early summer 2026, a level not seen since 2015 [3] Company Plans and Economic Impact - The Mt. Holly smelter, when fully operational, is projected to contribute approximately $900 million annually to South Carolina's economy, with new jobs offering an average wage of $125,000 [5] - The restart initiative is supported by recent increases in Section 232 tariffs, reflecting the administration's backing for the domestic aluminum industry [4] - Century Aluminum attributes its success to collaboration with Santee Cooper, with final restart details pending confirmation of economic incentives from Berkeley County and the state of South Carolina [6][8]

Market Overview - Major U.S. benchmarks rose less than 1% at the start of the week, primarily driven by gains from big tech corporations following Nvidia's $100 billion investment-partnership announcement with OpenAI [1] - Investor confidence may be temporary due to the growing market consensus of a potential government shutdown in the U.S. as Congress approaches the September 30 funding deadline without a clear agreement [1] Investment Recommendations - Recommended stocks for prudent investors include The Hanover Insurance Group (THG), Alcoa Corp. (AA), Pentair (PNR), Elbit Systems (ESLT), and Leonardo DRS, Inc. (DRS) as they bear low leverage and are considered safer options during market turmoil [2][10] - These stocks are expected to provide steady returns due to their solid growth prospects and improving revenue estimates for 2025 [10] Significance of Low-Leverage Stocks - Leverage refers to borrowing capital for operations and expansion, typically through debt financing, which can pose risks if not managed properly [4][5] - Companies with low debt-to-equity ratios are generally seen as less risky, especially during economic downturns [6][11] Stock Analysis Metrics - The debt-to-equity ratio is a key metric indicating financial risk, with a lower ratio reflecting improved solvency [7] - Stocks with a debt-to-equity ratio less than the industry median, a current price of at least $10, and substantial trading volume are preferred [12] Company Profiles - **The Hanover Insurance Group (THG)**: Focuses on insurance protection for businesses and personal items, with a projected 5.4% revenue improvement for 2025 and a 17.5% increase in earnings [15][16] - **Alcoa Corp. (AA)**: A leader in aluminum products, with a 6.1% expected sales growth for 2025 and a long-term earnings growth rate of 51.2% [17][18] - **Pentair (PNR)**: Provides sustainable water solutions, with a 1.5% sales growth estimate for 2025 following a strategic acquisition [19][20] - **Elbit Systems (ESLT)**: A leader in defense technology, with a projected 13.8% sales improvement for 2025 and a long-term earnings growth rate of 23.3% [20][21] - **Leonardo DRS (DRS)**: Develops advanced defense products, with a 10.9% expected sales growth for 2025 and a long-term earnings growth rate of 17.3% [22][23]

Core Points - Century Aluminum Company closed a private offering of 6.875% senior secured notes due August 2032, raising gross proceeds of $400 million [1] - The net proceeds from the offering were approximately $395 million, which will be used to refinance existing debt, repay borrowings, and cover offering expenses [2] - The Secured Notes will pay interest semi-annually at a rate of 6.875% per annum, starting February 1, 2026, and will mature on August 1, 2032 [3] Company Overview - Century Aluminum is the largest producer of primary aluminum in the United States and operates production facilities in Iceland, the Netherlands, and Jamaica [6]

Group 1 - Century Aluminum Company announced a proposed private offering of $400 million aggregate principal amount of senior secured notes due July 2032 [1] - The net proceeds from the offering will be used to refinance the existing 7.50% Senior Secured Notes due 2028, repay borrowings under credit facilities, and cover related fees and expenses [1] - The interest rate and other terms of the secured notes will be determined at the pricing of the offering [2] Group 2 - The secured notes will be offered to qualified institutional buyers under Rule 144A and to certain non-U.S. persons under Regulation S of the Securities Act [3] - The secured notes have not been registered under the Securities Act or any state securities laws, and cannot be offered or sold in the U.S. without registration or an applicable exemption [3] Group 3 - Century Aluminum is an integrated producer of bauxite, alumina, and primary aluminum products, and is the largest producer of primary aluminum in the United States [5]

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]