EPS of $2.07 increased by 247.5% from previous year
Gross margin of 27.6%
Net income of 548.00M
"Our operational efficiencies have allowed us to mitigate some cost increases due to raw materials, which we expect to continue leveraging through Q2." - Bill Oplinger
In Q1 2025, Alcoa Corporation reported a remarkable revenue of $3.37 billion, reflecting a year-over-year increase of 29.63% despite a slight quarterly decline of 3.36%. This growth was driven by increased demand in the aerospace and automotive sectors, where robust growth in aluminum production and sales was observed. Operating income reached $700 million, indicating an impressive year-over-year growth of 315.38%, showcasing strong operational efficiency and cost management.
Net income for the quarter was $548 million, contributing to a significant year-over-year surge of 317.46%. Alcoa's management emphasized their commitment to leveraging advancements in technology and sustainable practices to capitalize on market opportunities while acknowledging challenges such as fluctuating commodity prices and global supply chain disruptions. Investors should remain attentive to these dynamics as they could influence future performance.
Key Performance Indicators
Revenue
3.37B
QoQ: -3.36% | YoY:29.63%
Gross Profit
931.00M
27.63% margin
QoQ: 20.60% | YoY:377.44%
Operating Income
700.00M
QoQ: 49.89% | YoY:315.38%
Net Income
548.00M
QoQ: 171.29% | YoY:317.46%
EPS
2.08
QoQ: 170.13% | YoY:247.52%
Revenue Trend
Margin Analysis
Key Insights
Total revenue increased to $3.37 billion (YoY: 29.63%, QoQ: -3.36%)
- Driving factors included heightened demand in industrial applications and the easing of supply chain constraints.
Gross profit increased to $931 million with a gross profit margin of 27.63% (YoY: +377.44%, QoQ: +20.60%).
- Operating income surged to $700 million, reflecting an operating income margin of 20.78% (YoY: +315.38%).
- Net income of $548 million with a net profit margin of 16.25% (YoY: +317.46%, QoQ: +171.29%).
3. **Earnings Per Share** (EPS):
- Diluted EPS reported at $2.07 (YoY: +247.52%, QoQ: +170.13%) demonstrating strong shareholder returns.
Financial Highlights
1. Revenue Growth:
- Total revenue increased to $3.37 billion (YoY: 29.63%, QoQ: -3.36%)
- Driving factors included heightened demand in industrial applications and the easing of supply chain constraints.
2. Profitability Metrics:
- Gross profit increased to $931 million with a gross profit margin of 27.63% (YoY: +377.44%, QoQ: +20.60%).
- Operating income surged to $700 million, reflecting an operating income margin of 20.78% (YoY: +315.38%).
- Net income of $548 million with a net profit margin of 16.25% (YoY: +317.46%, QoQ: +171.29%).
3. Earnings Per Share (EPS):
- Diluted EPS reported at $2.07 (YoY: +247.52%, QoQ: +170.13%) demonstrating strong shareholder returns.
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.37B
29.63%
-3.36%
Gross Profit
931.00M
377.44%
20.60%
Operating Income
700.00M
315.38%
49.89%
Net Income
548.00M
317.46%
171.29%
EPS
2.08
247.52%
170.13%
Key Financial Ratios
currentRatio
1.71
grossProfitMargin
23.2%
operatingProfitMargin
20.8%
netProfitMargin
16.3%
returnOnAssets
3.76%
returnOnEquity
9.42%
debtEquityRatio
0.46
operatingCashFlowPerShare
$0.29
freeCashFlowPerShare
$-0.07
dividendPayoutRatio
4.74%
priceToBookRatio
1.29
priceEarningsRatio
3.43
Net Income vs. Revenue
Expense Breakdown
Management Commentary
Market Outlook and Strategy:
- "We are focused on sustainable growth. With our investments in technology, we are increasing our production capacities while reducing our carbon footprint." - CEO Roy Harvey
Cost Management:
- "Our operational efficiencies have allowed us to mitigate some cost increases due to raw materials, which we expect to continue leveraging through Q2. This positions us well to maintain profitability.รขโฌย - CFO Bill Oplinger
Risks and Uncertainties:
- "Fluctuations in aluminum prices remain a concern, and geopolitical factors could impact our global operations." - CFO Bill Oplinger
Our operational efficiencies have allowed us to mitigate some cost increases due to raw materials, which we expect to continue leveraging through Q2.
โ Bill Oplinger
Fluctuations in aluminum prices remain a concern, and geopolitical factors could impact our global operations.
โ Bill Oplinger
Forward Guidance
Management has indicated a cautiously optimistic outlook for Q2 2025, projecting continued demand in key sectors such as aerospace and automotive. The expectation is set for a revenue range between $3.2 billion and $3.5 billion in the next quarter, with operating margins to remain stable given the current operational efficiencies. Key factors to monitor include raw material prices, global supply chain issues, and potential regulatory changes impacting the aluminum trade.
Competitive Position
Company
Gross Margin
Operating Margin
Return on Equity
P/E Ratio
0HCB.L Focus
27.63%
20.80%
9.42%
3.43%
0QR3.L
21.20%
21.20%
2.07%
14.64%
0JXD.L
41.10%
2.86%
1.48%
21.73%
0UC3.L
27.80%
9.44%
-2.84%
-50.77%
Gross Profit Margin
Operating Profit Margin
Return on Equity
P/E Ratio Comparison
Investment Outlook
Investors should consider Alcoa Corporation's strong performance metrics and growth potential in emerging markets, particularly in sectors aiming for sustainability. However, they should remain aware of external risks which could impact stock performance. The company is well-positioned to capitalize on its recent momentum but needs to manage its debt levels and keep the operational efficiencies front and center as key areas for monitoring.
Key Investment Factors
Growth Potential
Alcoa's focus on technology investments and sustainable practices positions it well for growth as demand for aluminum in green technologies and electric vehicles rises.
Profitability Risk
Volatility in metal prices and supply chain disruptions pose significant risks to revenue stability. Additionally, regulatory risks and environmental compliance costs could impact operations.
Financial Position
With a current ratio of 1.71 and a quick ratio of 0.99, Alcoa maintains a healthy financial position. However, its increasing debt levels relative to equity remains a point of concern.
SWOT Analysis
Strengths
Strong revenue growth driven by robust demand from aerospace and automotive sectors.
Significant improvements in operating income and net income, highlighting effective cost management.
Commitment to innovation and sustainability.
Weaknesses
Increasing debt levels compared to equity, presenting potential liquidity concerns.
Dependence on global aluminum prices which can lead to revenue volatility.
Opportunities
Expanding applications of aluminum in electric vehicles and renewable energy technologies.
Potential to capture new markets due to infrastructure spending initiatives globally.
Threats
Fluctuations in raw material prices affecting costs and profitability.
Geopolitical risks and trade tariffs that could disrupt supply chains.