Alcoa shares jump on stronger-than-expected profit

Alcoa Corp (NYSE:AA ) reported third-quarter earnings that surpassed analyst estimates, sending its shares up 5.4% in after-hours trading. The Dow Jones Aluminum producer's results were boosted by higher alumina prices and lower raw material costs.

Alcoa posted adjusted earnings per share of $0.57 for the third quarter, significantly beating the analyst consensus of $0.28. Revenue came in at $2.9 billion, slightly below the $2.97 billion estimate but flat compared to the previous quarter.

The company's revenue increased 11.6% YoY from $2.6 billion in the same quarter last year.

The aluminum giant's net income rose to $90 million, or $0.38 per share, up from $20 million, or $0.11 per share, in the second quarter. Adjusted EBITDA excluding special items jumped to $455 million, a $130 million increase from the previous quarter.

"Positive markets and our focus on continuous improvement led to stronger results for the third quarter, while we continue to execute initiatives to further enhance our operations," said Alcoa President and CEO William F. Oplinger.

Alcoa's improved performance was primarily driven by a 22% increase in average realized third-party alumina prices and lower raw material costs. The company also benefited from the absence of net income attributable to noncontrolling interest for the full quarter following its acquisition of Alumina (OTC:AWCMY ) Limited on August 1.

Looking ahead, Alcoa maintained its 2024 production outlook for both its Alumina and Aluminum segments. The company increased its projection for Alumina shipments to range between 12.9 and 13.1 million metric tons, up 0.2 million metric tons from the prior forecast.

Alcoa ended the quarter with a cash balance of $1.3 billion and reported 45 days of working capital, a sequential increase of four days primarily due to an increase in inventory days on timing of shipments.

Source: Investing.com