In This Article:
-
Revenue: $3.4 billion, down 3% sequentially.
-
Net Income: $548 million, up from $202 million in the prior quarter.
-
Earnings Per Share (EPS): $2.07, more than doubling from the previous quarter.
-
Adjusted Net Income: $568 million, or $2.15 per share.
-
Adjusted EBITDA: $855 million, an increase of $178 million.
-
Cash Balance: $1.2 billion at the end of the first quarter.
-
Free Cash Flow: Positive, with contributions from net non-controlling interest.
-
Return on Equity: 39.1% year-to-date.
-
Days Working Capital: Increased to 47 days, up 13 days sequentially.
-
Debt Issuance: $1 billion in Australia, with $890 million tendered for 2027 and 2028 notes.
-
Adjusted Net Debt: $2.1 billion at the end of the first quarter.
-
Dividend: $26 million added to stockholder capital returns.
-
US Section 232 Tariffs: Estimated annual cost of $400 million to $425 million, with a net negative impact of approximately $100 million.
Release Date: April 16, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
-
Alcoa Corp (NYSE:AA) reported strong first-quarter financial and production results, with no fatal or serious injuries, highlighting a strong safety culture.
-
The company completed a $1 billion debt offering in Australia, extending maturities at a lower after-tax interest expense.
-
Alcoa Corp (NYSE:AA) formed a joint venture with IGNIS EQT for the San Ciprian operations, resuming production at the smelter.
-
First-quarter net income attributable to Alcoa was $548 million, with earnings per share more than doubling to $2.07.
-
The company ended the first quarter with a cash balance of $1.2 billion, supported by strong EBITDA and positive cash flow from operations.
Negative Points
-
Revenue decreased by 3% sequentially to $3.4 billion, with a notable decline in the aluminum segment due to lower average realized prices and shipments.
-
The US Section 232 tariffs on Canadian aluminum imports increased to 25%, resulting in an estimated annual negative impact of $100 million on Alcoa's business.
-
The Alumina segment's adjusted EBITDA decreased by $52 million due to lower alumina prices and unfavorable currency impacts.
-
The Aluminum segment's adjusted EBITDA decreased by $60 million, impacted by higher alumina costs and increased production, energy, and raw material costs.
-
Working capital increased significantly in the first quarter, driven by higher raw material prices and volumes, leading to elevated inventory levels.
Q & A Highlights
Q: Can you clarify the impact of tariffs on Alcoa's financials, particularly the $105 million quarterly hit and the $100 million annual impact? A: (Molly Beerman, CFO) The $100 million annual impact is net of the higher Midwest premium and Canadian metal sales into the US, offset by the $400 million cost of the Canadian tariff. The $105 million is a quarterly figure based on an LME of $2,400 and a Midwest premium of $0.39. The Midwest premium has not responded as expected due to negative market sentiment and inventory stockpiling in the US.