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Alcoa (NYSE:AA) +1.9% in Thursday’s trading despite reporting a larger than expected Q1 adjusted loss and a drop in revenues from the year-ago quarter, as the company made some positive industry-related comments.
Alcoa (AA) said its Q1 GAAP loss rose slightly to $252M, or $1.41/share, from a loss of $231M, or $1.30/share, in the year-earlier quarter, while revenues fell 2.7% Y/Y to $2.6B, reflecting lower average realized third-party prices for aluminum and higher production costs.
Q1 adjusted EBITDA fell 45% Y/Y to $132M but came in higher than the $113M analyst consensus compiled by Bloomberg.
On the earnings conference call, Alcoa (AA) said its overall outlook is positive with near-term markets showing signs of improvement, and the long-term outlook remains very positive for both the Alumina and Aluminum segments.
The company said Alumina prices recently reached a two-year high, while demand has remained steady, and demand is improving on the Aluminum side.
“The market is really starting to shape up favorably for the company… Aluminum prices have been going up on the back of strong demand,” Alcoa (AA) CEO William Oplinger told Barron’s.
The company maintained full-year guidance for aluminum shipments of 2.5M-2.6M metric tons and alumina shipments of 12.7M-12.9M metric tons.
BMO Capital analyst Katja Jancic says Alcoa (AA) is well positioned to benefit from positive aluminum price momentum, and the company continues to take actions that should deliver profitability improvements over time, “albeit likely at a slower pace than we initially expected.”
