Executive Summary
Alcoa Corporation reported strong performance in Q3 2024, delivering revenue of $2.9 billion, a slight stabilization from the previous quarter. The company achieved a net income of $90 million, significantly up from $20 million in Q2 2024, reflecting an overall robust recovery following strategic actions and operational improvements. Adjusted EBITDA rose to $455 million, driven by increased prices for alumina amidst a favorable market environment. Management emphasized a strong focus on operational excellence, strategic acquisitions, and safety protocols, which are expected to support continued growth amid industry challenges.
Key Performance Indicators
QoQ: 37.00% | YoY:284.21%
QoQ: 100.00% | YoY:180.70%
QoQ: 350.00% | YoY:153.57%
QoQ: 254.55% | YoY:141.49%
Key Insights
**Revenue:** $2.9 billion (flat QoQ), **Net Income:** $90 million (up 350% QoQ), **EPS:** $0.38 (up 254.55% QoQ). **Gross Profit Margin:** 17.6% (improved from 12.8% in Q2), indicating enhanced cost management. **Return on Equity:** 0.6%, turning positive for year-to-date operations. **Free Cash Flow:** Neutral for the quarter with a steady cash balance of $1.3 billion. Management projected increased alumina shipments of 12.9 to 13.1 million tons for the year, reflecting positive market dynamics...
Financial Highlights
Revenue: $2.9 billion (flat QoQ), Net Income: $90 million (up 350% QoQ), EPS: $0.38 (up 254.55% QoQ). Gross Profit Margin: 17.6% (improved from 12.8% in Q2), indicating enhanced cost management. Return on Equity: 0.6%, turning positive for year-to-date operations. Free Cash Flow: Neutral for the quarter with a steady cash balance of $1.3 billion. Management projected increased alumina shipments of 12.9 to 13.1 million tons for the year, reflecting positive market dynamics despite the high cost environment.
Income Statement
Metric |
Value |
YoY Change |
QoQ Change |
Revenue |
2.90B |
11.61% |
-0.07% |
Gross Profit |
511.00M |
284.21% |
37.00% |
Operating Income |
184.00M |
180.70% |
100.00% |
Net Income |
90.00M |
153.57% |
350.00% |
EPS |
0.39 |
141.49% |
254.55% |
Key Financial Ratios
operatingProfitMargin
6.34%
operatingCashFlowPerShare
$0.6
freeCashFlowPerShare
$-0.01
dividendPayoutRatio
28.9%
Management Commentary
Safety and Operations Strategy: "No fatal or serious injuries in the third quarter. A strong safety culture supports operational excellence."- William Oplinger, CEO. Market Trends: "Alumina prices increased to the highest since 2018 due to supply disruptions, with continued strong demand from smelters enhancing our position."- Molly Beerman, CFO. Acquisitions Impact: "The acquisition of Alumina Limited has broadened our market exposure and resulted in cash tax savings of approximately $100 million over the next 12-18 months."- William Oplinger, CEO.
"We've maintained a fast pace of execution on our strategic priorities, while progressing operational excellence with safety, stability, and continuous improvement." - William Oplinger, CEO
â William Oplinger
"We expect transformation expenses to improve and a solid return-seeking capital agenda to support our growth initiatives." - Molly Beerman, CFO},
â Molly Beerman
Forward Guidance
Alcoa's outlook for Q4 anticipates stable revenues with an expectation of favorable conditions in the Alumina segment, projecting increased EBITDA driven by higher shipments coupled with improved production costs. However, management noted potential rising costs in the Aluminum segment could adversely affect profitability. Investors should monitor alumina pricing trends and operational efficiencies moving into 2025, particularly concerning cost management and capital allocation toward debt reduction and strategic projects.