Alcoa (AA) Tops Q4 EPS by 15c

Alcoa (NYSE: AA) reported Q4 EPS of $0.26, $0.15 better than the analyst estimate of $0.11. Revenue for the quarter came in at $2.39 billion versus the consensus estimate of $2.35 billion.

2021 Outlook:

Primary aluminum consumption is expected to increase in both China and ex-China in 2021 with the recovery from the pandemic and the impact of additional stimulus measures. As supply growth is projected to be lower than demand growth, the global primary aluminum market is anticipated to be closer to balance in 2021.

In 2021, the Company projects total bauxite shipments to range between 49.0 and 50.0 million dry metric tons, an improvement from 2020. Total alumina shipments are expected to be between 13.9 and 14.0 million metric tons and stable in comparison to 2020. The Aluminum segment is expected to ship between 2.7 and 2.8 million metric tons, a decrease from 2020 related to the changes in the portfolio but well positioned to benefit from the recovery in value-add products.

Outside of the market improvements expected, in the first quarter of 2021, Alcoa anticipates lower quarterly performance results in the Bauxite segment due primarily to lower internal bauxite pricing and lower earnings from minority owned mines. In the Alumina segment, the Company expects the offsetting benefit from lower bauxite internal prices, partially offset by higher energy costs and seasonal maintenance costs. In the Aluminum segment, lower quarterly performance is expected due to higher sequential alumina costs as well as other unfavorable items.

Based on current alumina and aluminum market conditions, the Company expects first quarter tax expense to approximate $65 million, which may vary with market conditions and jurisdictional profitability.

The COVID-19 pandemic is ongoing, and its magnitude and duration continue to be unknown. The uncertainty around its future impact on the Company’s business, financial condition, operating results, and cash flows could cause actual results to differ from this outlook.

For earnings history and earnings-related data on Alcoa (AA) click here.

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