Alcoa (NYSE: AA) reported Q4 EPS of ($0.56), $0.28 better than the analyst estimate of ($0.84). Revenue for the quarter came in at $2.6 billion versus the consensus estimate of $2.6 billion.

2024 Outlook:

• The following outlook does not include reconciliations of the forward-looking non-GAAP financial measures Adjusted EBITDA and Adjusted Net Income, including transformation, intersegment eliminations and other corporate Adjusted EBITDA; operational tax expense; and other expense; each excluding special items, to the most directly comparable forward-looking GAAP financial measures because it is impractical to forecast certain special items, such as restructuring charges and mark-to-market contracts without unreasonable efforts due to the variability and complexity associated with predicting the occurrence and financial impact of such special items. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
• For 2024, the Company is providing an outlook for both production and shipments for both segments. Alcoa expects alumina production to range between 9.8 and 10.0 million metric tons and alumina shipments to range between 12.7 and 12.9 million metric tons in 2024. The difference between production and shipments reflects trading volumes and externally sourced alumina to fulfill customer contracts due to the curtailment of the Kwinana refinery. The Aluminum segment is expected to produce 2.2 to 2.3 million metric tons, an increase from 2023 due to smelter restarts. Aluminum shipments are expected to be between 2.5 million and 2.6 million metric tons, consistent with 2023, as increased shipments from smelter restarts are offset by lower trading volumes.
• Within first quarter 2024 Alumina Segment Adjusted EBITDA, the Company expects approximately $15 million of unfavorable impacts related to higher maintenance costs and lower shipments in Australia. In addition, the Company expects sequential benefits from lower raw material and energy costs to be fully offset by other factors.
• Within first quarter 2024 Aluminum Segment Adjusted EBITDA, the Company expects sequential favorable energy costs, primarily due to lower prices in Brazil and Norway, to be fully offset by lower product premiums and an unfavorable net impact due to the non-recurrence of fourth quarter 2023 items related to the IRA 45X credit and carbon dioxide compensation changes in Norway. Alumina costs in the Aluminum segment are expected to be unfavorable by $5 million sequentially. Additionally, the Company expects an unfavorable sequential impact of approximately $20 million from hedge programs for the Alumar smelter restart, which ended in December 2023.
• Other income for the fourth quarter of 2023 included favorable impacts of $51 million related to foreign currency gains that may not recur.
• Based on current alumina and aluminum market conditions, Alcoa expects negligible first quarter operational tax expense, which may vary with market conditions and jurisdictional profitability.

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