Rise In Aluminium Prices Boost Alcoa’s Q3 Numbers Above Market Expectations

Rise In Aluminium Prices Boost Alcoa’s Q3 Numbers Above Market Expectations

American aluminium pioneer Alcoa Corporation released third-quarter results yesterday, reporting numbers riding higher on an increase in aluminium prices thanks to the Trump administration’s tariffs and rising sales.

For the quarter, Alcoa’s revenue totaled US$3.4 billion. The firm realized a net loss of US$41 million, which included planned changes to the company’s pension plan and post-employment benefits. Less special items, the firm reported an adjusted net income of US$119 million and an EBITDA of US$795 million.

In addition to reporting market-beating results, Alcoa announced a stock-repurchase program, which is a facet of the firm’s 2018 capital allocation framework. The company plans to buy back approximately US$200 million in common stock, which may vary depending upon available cash flow, market conditions, and other factors. The program, which has not been given an expiration date, will end with the retiring of the repurchased stock.

President and Chief Executive Officer Roy Harvey hailed the quarter’s results as proof positive of the firm’s financial strategies.

“Today’s stock buyback announcement, our smaller net pension and OPEB liability, and our results since launching Alcoa Corporation nearly two years ago all point to the success of our strategic priorities.

“By reducing complexity, driving returns, and strengthening the balance sheet, we’ve made Alcoa a much stronger company even as commodity markets remain volatile. We’re pleased to announce a program to return cash to stockholders, and we look forward to improving our Company further as 2018 comes to an end.”

Alcoa projects a deficit in both the aluminium and alumina markets for the year, but a surplus for bauxite ore. The firm forecasts a worldwide deficit of aluminium of up to 1.4 million metric tons, with a rise in demand of up to 4.75 percent for the year. Alcoa sees a global deficit in alumina of up to 1.2 million metric tons, but a glut of unspecified quantity for bauxite ore, the latter to be despite rising demand from buyers in the People’s Republic of China.