A month has gone by since the last earnings report for Arconic (ARNC). Shares have added about 6.1% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Arconic due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Arconic's Earnings & Revenues Top Estimates in Q2
Arconic swung to a loss (as reported) of $121 million or 27 cents per share in second-quarter 2019, from a profit of $120 million or 24 cents in the prior-year quarter. The bottom line was hurt by non-cash asset impairment charges of $357 million.
Barring one-time items, adjusted earnings per share were 58 cents, up from 37 cents a year ago. The figure topped the Zacks Consensus Estimate of 50 cents.
Arconic generated revenues of $3,691 million, up around 3% year over year. It beat the Zacks Consensus Estimate of $3,641.7 million.
Organic revenues rose 10% year over year on the back of strong volumes across all segments and major markets and favorable pricing.
Segment Highlights
EP&S: Revenues in the division were $1.6 billion, up 6% year over year. Organic revenues in the segment rose 8%, supported by growth in aerospace engines and defense.
GRP: Revenues in the division came in at $1.6 billion in the quarter, essentially flat year over year. Organic revenues in the segment went up 11%.
TCS: Revenues in the segment were $548 million, down 2% year over year. Organic revenues rose 3%.
Financial Position
Arconic had cash and cash equivalents of $1,357 million at the end of the quarter, down around 7% year over year. Long-term debt fell roughly 7% year over year to $5,901 million.
Cash provided from operations was $106 million in the reported quarter.
Outlook
Arconic continues to expect revenues in the range of $14.3-$14.6 billion for 2019. The company has raised its adjusted earnings guidance to the range of $1.95-$2.05 per share from the prior view of $1.75-$1.90 per share. Moreover, it now expects adjusted free cash flow to be in the band of $700-$800 million, up from $650-$750 million expected earlier.
The company expects adjusted earnings for the third quarter to be in the range of 47-53 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 5.76% due to these changes.
VGM Scores
At this time, Arconic has an average Growth Score of C, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of B on the value side, putting it in the second quintile for this investment strategy.