=Alcoa (AA) reported earnings on Mon 11 Apr 2016 (a/h)

Alcoa beats by $0.04, misses on revs; lowers FY16 aluminum demand growth to +5% from +6%; spin off on track for 2H :

• Reports Q1 (Mar) adj. earnings of $0.07 per share, $0.04 better than the Capital IQ Consensus of $0.03; revenues fell 15.0% year/year to $4.95 bln vs the $5.15 bln Capital IQ Consensus, including a 5.7% revenue increase related to acquisitions and organic growth, more than offset by a 20.7% revenue decline primarily from continued low alumina and aluminum prices, foreign exchange impacts and divested, curtailed or closed operations
• Arconic Segments (Value-Add) Overview
  • Revenue of $3.3 billion, down 2.2% year-over-year, reflects: o 6.7% revenue increase predominantly related to acquisitions, offset by 8.3% revenue decline from metal and foreign exchange impacts and 0.6% revenue decline from divested or closed operations
  • After-tax operating income of $269 million, up 8% year-over-year, adjusted EBITDA of $537 million, up 7% year-over-year, and record adjusted EBITDA margin of 16.4%.
• New Alcoa Segments (Upstream) Overview
  • Third-party revenue of $1.7 billion, down 32.2% year-over-year, reflects: 4.5% revenue increase from organic growth more than offset by 26.1% revenue decline due to lower pricing and foreign exchange impacts and 10.6% revenue decline predominantly related to curtailed or closed operations
  • Total revenue of $2.1 billion, after-tax operating income of $22 million, and adjusted EBITDA of $185 million
  • Profitable Alumina and Primary Metals segments despite 19% price decline in the Alumina Price Index, and flat aluminum pricing, sequentially; year-over-year declines of 40 and 26%, respectively
• In 2016, Alcoa projects an ~1.1 million metric ton global aluminum deficit as 5% global aluminum demand growth (revised from 6%) outweighs 2% global aluminum supply growth (revised from 3%). In addition, the Company projects a global alumina deficit of 1.4 million metric tons.
  • Aerospace +6-8% from +8-9% (market transition); Alcoa projects solid growth in all its other end markets.
• Value add segments separation on track for 2H.