Summary
Howmet Aerospace Inc. (formerly Alcoa Inc.), operating as Arconic Inc. at the time of this filing, reported its financial results for the third quarter and the first nine months ended September 30, 2016. The company experienced a notable increase in net income attributable to Arconic in the third quarter of 2016 compared to the prior year, driven by productivity improvements across segments, though this was partially offset by unfavorable price/product mix and lower realized alumina pricing. For the nine-month period, net income saw a decrease primarily due to lower average realized prices for aluminum and alumina, and unfavorable price/product mix, though this was largely mitigated by productivity gains and reduced restructuring charges. A significant event impacting the company was the impending separation of Arconic into two distinct publicly-traded companies: Arconic Inc. (focusing on engineered products and solutions) and Alcoa Corporation (focusing on alumina and primary metals). This separation was completed on November 1, 2016. Costs associated with this separation were recognized in Selling, general administrative, and other expenses. Additionally, a 1-for-3 reverse stock split was completed on October 6, 2016, which impacted the common stock and additional capital accounts.
Financial Highlights
50 data points| Revenue | $3.14B |
| R&D Expenses | $30.00M |
| SG&A Expenses | $229.00M |
| Operating Expenses | $4.88B |
| Operating Income | $237.00M |
| Interest Expense | $126.00M |
| Net Income | $166.00M |
| EPS (Basic) | $0.34 |
| EPS (Diluted) | $0.33 |
| Shares Outstanding (Basic) | 438.00M |
| Shares Outstanding (Diluted) | 453.00M |
Key Highlights
- 1Arconic Inc. (formerly Alcoa Inc.) reported a significant increase in third-quarter 2016 net income attributable to the company ($166 million) compared to the same period in 2015 ($44 million), driven by productivity improvements.
- 2Sales for the third quarter of 2016 decreased by 6% to $5,213 million compared to $5,573 million in the prior year's quarter, reflecting lower average realized prices for aluminum and alumina.
- 3The company completed a 1-for-3 reverse stock split on October 6, 2016, adjusting its common stock and additional capital accounts accordingly.
- 4Significant restructuring and other charges were incurred in both periods, totaling $18 million for Q3 2016 and $134 million for the nine months of 2016, primarily related to cost reduction initiatives, facility closures/curtailments, and the separation transaction.
- 5The separation of Arconic into two companies, Arconic Inc. and Alcoa Corporation, was completed on November 1, 2016, following board approval and a pro rata distribution of Alcoa Corporation shares.
- 6Costs related to the separation transaction amounted to $55 million in SG&A expenses for Q3 2016 and $118 million for the first nine months of 2016.
- 7Cash from operations decreased substantially to $208 million for the first nine months of 2016 from $717 million in the same period of 2015, primarily due to lower operating results.