Alcoa (AA) Posts Q4 EPS Beat and In-Line Revenues, Goldman Sachs Expects Results to Be 'Well Received'

January 19, 2022 5:17 PM EST
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Alcoa (NYSE: AA) shares rose 1.5% after-hours Wednesday after the company reported its Q4 results, with EPS coming in at $2.50, ex-items, beating the consensus estimate of $1.77. Quarterly revenue grew 7% sequentially to $3.3 billion, representing the highest quarterly result since Q4/18 and coming in line with Street estimates.

For the full 2021-year, the company’s revenue was $12.2 billion (up 31% year-over-year), the highest since 2018. The company delivered its highest annual net income of $429 million, driven by continued strength in alumina and aluminum pricing and solid operational performance.

The company improved its balance sheet by eliminating long-term debt maturities until 2027, as well as redeeming $750 million and $500 million in higher interest rate notes and issuing $500 million in lower interest rate notes.

The company provided its full 2022-year outlook, expecting total bauxite shipments in the range of 48.0 - 49.0 million dry metric tons, consistent with 2021. Total alumina shipments are projected to range from 14.2 million to 14.4 million metric tons, an increase from the previous year with the resolution of the San Ciprián strike and recovery from the outage of a bauxite unloader at Alumar. The company expects the Aluminum segment to ship 2.5 - 2.6 million metric tons, a net decrease from the previous year primarily related to the divestiture of the Warrick Rolling Mill and changes in the smelting portfolio.

Commenting on the results, Goldman Sachs analyst Emily Chieng said news that Q1 EBITDA will be flat versus Q4 should be "well-received" given investor worries about cost pressures. The analyst has a Conviction Buy List rating on the stock.

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