Executive Summary
In Q2 2024, Alcoa Corporation reported impressive financial results marked by a substantial recovery from previous quarters. The company achieved a revenue of $2.906 billion, up 11.81% quarter-over-quarter and 8.27% year-over-year. Notably, net income soared to $20 million, a remarkable 119.61% increase year-over-year, reflecting the company's successful optimization of operations and cost controls amidst fluctuating global demand for aluminum products.
The earnings call highlighted management's confidence in ongoing demand recovery and strong operational performance driven by effective management strategies. The company's ability to return to profitability is underscored by a gross profit margin improvement to 12.83% for the quarter. This report discusses key financial metrics, operational insights from the earnings call, and sets expectations for future performance.
Key Performance Indicators
QoQ: 91.28% | YoY:120.71%
QoQ: 128.31% | YoY:192.93%
QoQ: 107.94% | YoY:119.61%
QoQ: 107.80% | YoY:119.30%
Key Insights
Revenue reached $2.906 billion in Q2 2024, showing an 11.81% increase from the prior quarter and an 8.27% increase year-over-year. Gross profit significantly improved to $373 million, up 120.71% year-over-year, while the operating income of $92 million reflects a 192.93% increase compared to Q2 2023. The net income of $20 million translates to an EPS of $0.11, marking a 119.30% rise year-over-year. Furthermore, cash flows from operating activities totaled $287 million, supporting a healthy free ...
Financial Highlights
Revenue reached $2.906 billion in Q2 2024, showing an 11.81% increase from the prior quarter and an 8.27% increase year-over-year. Gross profit significantly improved to $373 million, up 120.71% year-over-year, while the operating income of $92 million reflects a 192.93% increase compared to Q2 2023. The net income of $20 million translates to an EPS of $0.11, marking a 119.30% rise year-over-year. Furthermore, cash flows from operating activities totaled $287 million, supporting a healthy free cash flow balance of $123 million. Alcoa's balance sheet remains solid, with total assets of $14.307 billion and total stockholder equity at $3.899 billion. The current ratio stands at 1.549, indicating a strong liquidity position.
Income Statement
| Metric |
Value |
YoY Change |
QoQ Change |
| Revenue |
2.91B |
8.27% |
11.81% |
| Gross Profit |
373.00M |
120.71% |
91.28% |
| Operating Income |
92.00M |
192.93% |
128.31% |
| Net Income |
20.00M |
119.61% |
107.94% |
| EPS |
0.11 |
119.30% |
107.80% |
Key Financial Ratios
operatingProfitMargin
10.4%
operatingCashFlowPerShare
$1.58
freeCashFlowPerShare
$0.68
Management Commentary
Management emphasized the strategic focus on enhancing operational efficiencies: "We have successfully streamlined our operations, which has been instrumental in driving our profit margins up in challenging market conditions. We continue to focus on improving our cost structure while maintaining production levels."
Another important insight was on market demand: "The global demand for aluminum remains robust, particularly in the automotive and aerospace sectors, which are recovering strongly post-pandemic. This positions us favorably for the upcoming quarters."
We have successfully streamlined our operations, which has been instrumental in driving our profit margins up in challenging market conditions.
â Management Team
The global demand for aluminum remains robust, particularly in the automotive and aerospace sectors, which are recovering strongly post-pandemic.
â Management Team
Forward Guidance
Looking ahead, management anticipates continued growth and stability in aluminum demand driven by sustainable initiatives and infrastructure spending. Alcoa expects solid demand recovery in both the automotive and aerospace sectors, which could support future revenue increases. The company cited an achievable goal for Q3 2024 to maintain or improve upon Q2 performance levels, contingent on stable market conditions and supply chain efficiencies. Investors should monitor updates on global aluminum pricing and demand trends closely as potential volatility could impact profitability.