American value-added aluminium firm Arconic reported results for the third quarter of 2018 yesterday, beating Wall Street estimates for the quarter.
Arconic reported a third-quarter revenue of US$3.5 billion, a 9-percent rise on the year. Net income for the quarter totaled US$161 million, up from US$119 million in last year’s penultimate quarter. Net income less special items came to US$160 million last quarter.
The firm showed an operating income of US$345 million, a rise of 11 percent on the year. Less special items, Arconic’s remaining operating income totaled US$348 million, a 4-percent rise over last year’s third quarter.
The third quarter saw US$51 million in cash provided by operations, US$32 million used in financing activities, and US$65 million in cash provided by investing activities. Altogether, Arconic’s third-quarter free cash flow totaled US$115 million.
In the course of the third quarter Arconic extended its strategy review, which it estimates will be completed by year’s end. In addition, the firm came to terms with the sale of its idled aluminium rolling mill in Texarkana, Texas, which it has agreed to sell for US$300 million in cash plus up to another US$50 million in contingent consideration. The firm also began shopping its Building and Construction Systems business
Arconic Chief Executive Officer Chip Blankenship touted the firm’s accomplishments in the quarter, indicating that it will continue its ongoing task of shoring up its operational efficiencies.
“In the third quarter, Arconic delivered solid organic revenue growth while increasing adjusted free cash flow. Our team remains focused on operational improvements and portfolio refinements; this quarter we made the strategic decision to sell our idled rolling mill in Texarkana, Texas, which provides us with added financial flexibility as we continue to explore opportunities to enhance our portfolio. We have completed significant milestones as reported last quarter; however, we are extending the scope and duration of the strategy review to address additional scenarios. We now anticipate completing the strategy review in the fourth quarter.”
Going forward, Arconic doubled down on projections it made previously for the year’s results, forecasting a yearly revenue of between US$13.7 billion and US$14.0 billion and an adjusted free cash flow of around US$250 million.