Alcoa Turns To Profit In Q3, Progresses Toward Strategic Deal For San Ciprian Operations; Stock Up

Alcoa

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(RTTNews) - Alcoa Corp. (AA, AAI.AX) reported that its third quarter net income attributable to the company was $90 million or $0.38 per share compared to a loss of $168 million or $0.94 per share in the same quarter last year.

AA closed Wednesday's regular trading at $42.07 up $0.77 or 1.86%. In the after-hours trading, the stock further gained $3.63 or 8.63%.

Adjusted net income for the third-quarter was $135 million or $0.57 per share, compared to a loss of $202 million or $1.14 per share in the prior year. Analysts polled by Thomson Reuters expected the company to report earnings of $0.28 per share for the third quarter. Analysts' estimates typically exclude special items. The latest-quarter adjusted income excluded the impact from net special items of $45 million. Notable special items include a mark-to-market loss of $31 million related to energy contracts, restructuring charges of $14 million related to remediation and demolition costs at closed locations, and a restructuring charge of $12 million for contract termination costs at a closed location, partially offset by the tax and noncontrolling interest impact of these items.

Sales for the third quarter increased to $2.90 billion from $2.60 billion in the prior year. Analysts expected revenue of $2.97 billion for the quarter.

Alumina production decreased 4 percent sequentially to 2.44 million metric tons primarily due to the full curtailment of the Kwinana refinery completed in June 2024. In the Aluminum segment, production increased 3 percent sequentially to 559,000 metric tons primarily due to continued progress on the Alumar smelter restart.

In the Alumina segment, third-party shipments of alumina decreased 9 percent sequentially primarily due to decreased trading. In Aluminum, total shipments decreased 6 percent sequentially primarily due to decreased trading and the timing of shipments.

For the fourth quarter 2024, Alcoa expects Aluminum Segment performance to be flat, maintaining the strong performance from the third quarter 2024.

Alcoa expects total 2024 Alumina segment production to remain unchanged from the prior projection, ranging between 9.8 and 10.0 million metric tons. The company increased its projection for shipments to range between 12.9 and 13.1 million metric tons, an increase of 0.2 million metric tons from the prior projection primarily due to increased trading volumes.

Alcoa expects 2024 total Aluminum segment production and shipments to remain unchanged from the prior projection, ranging between 2.2 and 2.3 million metric tons, and between 2.5 and 2.6 million metric tons, respectively.

Alcoa has declared a quarterly cash dividend of $0.10 per share of the company's common stock and Series A convertible preferred stock, to be paid on November 15, 2024 to stockholders of record as of the close of business on October 29, 2024.

In a separate press release, Alcoa and IGNIS Equity Holdings, SL, the majority shareholder in the IGNIS Group of Companies, a vertically integrated energy company based in Spain, said that they are progressing toward entering into a strategic cooperation agreement to support the continued operation of Alcoa's San Ciprian operations.

As per the proposed agreement, Alcoa would contribute 75 million euros, and IGNIS EQT would make an initial investment of 25 million euros to fund the operations. Alcoa would continue as the managing operator of the San Ciprian operations, with IGNIS EQT holding 25 percent ownership.

Additionally, up to 100 million euros would be funded by Alcoa as needed for operations with a priority position in future cash returns. If further funding is required, both partners must agree and the funding would be shared 75 percent by Alcoa and 25 percent by IGNIS EQT.

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