Summary
Arconic Inc. (formerly Howmet Aerospace Inc.) announced on March 31, 2017, the divestiture of its Fusina, Italy rolling mill to Slim Aluminium. This strategic move is part of the company's ongoing effort to transition its Global Rolled Products segment away from being a commodity producer and towards becoming a higher-margin supplier focused on the aerospace and automotive industries. This divestiture is expected to result in restructuring-related charges, including a loss on sale, estimated at approximately $60 million after-tax, which will impact the first quarter of 2017 earnings by roughly $0.12 per diluted share. The charges are primarily non-cash impairments and a $10 million cash injection prior to the sale. Investors should note that while the sale is complete, final financial figures are still being determined. Further details regarding the financial impact of this transaction will be disclosed in Arconic's Form 10-Q for the quarter ending March 31, 2017. The company's stated strategy to focus on high-margin sectors signals a potential shift in its business model and future revenue streams, which warrants close monitoring by shareholders.
Key Highlights
- 1Arconic Inc. divested its Fusina, Italy rolling mill to Slim Aluminium on March 31, 2017.
- 2The divestiture is part of a strategic shift to focus on high-margin aerospace and automotive markets.
- 3The company is moving away from being a commodity producer within its Global Rolled Products segment.
- 4Arconic expects to record approximately $60 million in after-tax restructuring charges related to the sale.
- 5The charge will reduce diluted earnings per share by an estimated $0.12 in Q1 2017.
- 6The charges primarily consist of non-cash impairment and a $10 million cash injection.