PITTSBURGH - Alcoa Corporation (NYSE: NYSE:AA) today announced preliminary financial results for the second quarter of 2024, indicating sequential increases in revenue, net income, adjusted net income, and Adjusted EBITDA excluding special items. The positive performance is attributed to higher alumina and aluminum prices.
For the second quarter of 2024, revenue is expected to be between $2,850 million and $2,925 million. This represents an increase from $2,599 million in the first quarter of 2024 and $2,684 million in the second quarter of 2023.
Net income attributable to Alcoa Corporation is forecasted to be between $5 million and $25 million, a significant improvement from a net loss of $252 million in the previous quarter and a net loss of $102 million in the same quarter last year.
Earnings per share are projected to be $0.03 to $0.14, compared to a loss per share of $1.41 in the first quarter of 2024 and a loss per share of $0.57 in the second quarter of 2023. Adjusted net income is anticipated to be in the range of $15 million to $35 million, and Adjusted EBITDA excluding special items is expected to be between $310 million and $330 million.
The company's improved financial metrics are primarily due to the non-recurrence of a significant charge recorded in the first quarter related to the curtailment of the Kwinana refinery, in addition to favorable alumina and aluminum market conditions. Alcoa President and CEO William F. Oplinger expressed optimism about the results and the upcoming acquisition of Alumina (OTC:AWCMY) Limited, expected to close around August 1, 2024.
Alcoa's alumina production is expected to decrease by approximately 5 percent sequentially due to the full curtailment of the Kwinana refinery completed in June 2024. However, aluminum production is projected to remain consistent with the first quarter's output. Third-party shipments of alumina are expected to decrease by around 5 percent, while total aluminum shipments are expected to increase by approximately 7 percent sequentially.
The company's cash balance is expected to remain steady at $1.4 billion as of June 30, 2024, consistent with the prior quarter. Alcoa will announce its finalized second quarter results on Wednesday, July 17, 2024, and will hold a conference call to discuss the details.
This news overview is based on a press release statement and reflects preliminary financial information subject to finalization. The information provided is not to be relied upon unduly and may change upon the completion of the quarter-end close processes.
In other recent news, Alcoa Corporation has been the subject of several significant developments. The company reported flat revenues of $2.6 billion and a net loss of $252 million in its latest earnings call. However, Alcoa's cash balance rose to $1.4 billion, supported by a $750 million green bond issuance.
Morgan Stanley (NYSE:MS) upgraded Alcoa's stock from Equalweight to Overweight and raised the price target to $50.00, reflecting the disruptions in the global alumina supply. B.Riley also revised its price target for Alcoa shares to $39.00, maintaining a Neutral rating. Citi increased Alcoa's stock price target to $50.00, maintaining a Buy rating, citing anticipated cost savings and the cyclical nature of Alcoa's earnings.
Furthermore, Alcoa is nearing the final stages of its acquisition of Alumina Limited, expected to be completed around August 2024. This acquisition is seen as a value-enhancing transaction that will strengthen Alcoa's position in the aluminum industry.
The company also announced a revised acquisition agreement with Alumina Limited, moving closer to finalizing the transaction expected to conclude in the third quarter of 2024.
InvestingPro Insights
Alcoa Corporation's (NYSE: AA) latest financial forecast shows a promising turnaround with sequential increases in revenue and net income. In the context of their improved performance, it's essential to look at the company's broader financial health and market positioning as reflected by InvestingPro data and tips.
Despite the optimistic outlook, Alcoa's market capitalization stands at $6.94 billion, with a negative P/E ratio of -10.21, indicating that investors may still be cautious about the company's profitability. This sentiment is echoed in the InvestingPro Tips, which note that analysts do not expect the company to be profitable this year and have revised their earnings estimates downwards for the upcoming period. Moreover, Alcoa's gross profit margin over the last twelve months as of Q1 2024 was reported at 7.34%, which is considered weak compared to industry standards.
However, the company has seen a large price uptick over the last six months, with a 28.2% total return, signaling that market sentiment may be shifting. This could be attributed to strategic moves such as the upcoming acquisition of Alumina Limited and operational adjustments like the curtailment of the Kwinana refinery.
Investors looking to delve deeper into Alcoa's financials and market potential can find additional insights on InvestingPro, which offers 5 more InvestingPro Tips to guide investment decisions. And for those ready to take their analysis to the next level, use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription.
As Alcoa navigates the volatile aluminum market and focuses on its growth strategy, these insights can help investors understand the risks and opportunities associated with the stock.
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