=====Alcoa (AA) reported earnings on Tue 11 Oct 2016 (b/o)

Alcoa reports EPS in-line, misses on revs; lowers sales guidance for all three Arconic segments; spin off on track for Nov 1:

• Reports Q3 (Sep) adj. earnings of $0.32 per share, in-line with the Capital IQ Consensus of $0.32; revenues fell 6.5% year/year to $5.21 bln vs the $5.29 bln Capital IQ Consensus. 
• In spite of near-term market challenges, Arconic segments reported combined year-over-year profit growth, and Alcoa Corporation segments, Alumina and Primary Metals, maintained profitability sequentially despite continued low alumina and aluminum pricing by proactively managing costs and capacity. The Company's separation is scheduled to become effective before the opening of the market on November 1, 2016.
• Alcoa Corporation Segments
  • Total revenue of $2.3 billion, flat sequentially, reflecting continued low alumina prices and the impact of curtailed and closed operations; Third-party revenue of $1.8 billion, up 1% sequentially
  • ATOI of $128 million, down 15% sequentially, improved metal price more than offset by lower alumina pricing and unfavorable currency impacts
• Total revenue of $2.3 billion, flat sequentially, reflecting continued low alumina prices and the impact of curtailed and closed operations; Third-party revenue of $1.8 billion, up 1% sequentially
• ATOI of $128 million, down 15% sequentially, improved metal price more than offset by lower alumina pricing and unfavorable currency impacts
• Arconic Segments
  • Revenue of $3.4 bln, down 1 % year over year Reflects customer adjustments to delivery schedules in the aerospace industry, softness in the North America commercial transportation and pricing pressures, partially offset by strong North America automotive volume
  • After-tax Operating Income (:ATOI) of $267 million, up 4 % year over year
    • Global Rolled Products: $58 million of ATOI, up 23 % excluding the $18 million impact of transforming the Warrick rolling mill into a cold metal plant; record quarter for automotive sheet shipments, up 49 % year over year
    • Engineered Products and Solutions: record third quarter ATOI of $162 million, up 7 % year over year
    • Transportation and Construction Solutions: $47 million of ATOI, up 7 % year over year
• Revenue of $3.4 bln, down 1 % year over year Reflects customer adjustments to delivery schedules in the aerospace industry, softness in the North America commercial transportation and pricing pressures, partially offset by strong North America automotive volume
• After-tax Operating Income (:ATOI) of $267 million, up 4 % year over year
  • Global Rolled Products: $58 million of ATOI, up 23 % excluding the $18 million impact of transforming the Warrick rolling mill into a cold metal plant; record quarter for automotive sheet shipments, up 49 % year over year
  • Engineered Products and Solutions: record third quarter ATOI of $162 million, up 7 % year over year
  • Transportation and Construction Solutions: $47 million of ATOI, up 7 % year over year
• Global Rolled Products: $58 million of ATOI, up 23 % excluding the $18 million impact of transforming the Warrick rolling mill into a cold metal plant; record quarter for automotive sheet shipments, up 49 % year over year
• Engineered Products and Solutions: record third quarter ATOI of $162 million, up 7 % year over year
• Transportation and Construction Solutions: $47 million of ATOI, up 7 % year over year
• Arconic Segments Target Update: Alcoa is providing new full-year 2016 goals to reflect near-term industry challenges and foreign exchange impacts. In aerospace, this includes an unprecedented industry ramp-up to new platforms, destocking and supply chain optimization in airframes.
  • Global Rolled Products targets revenue of $4.8 bln to $5.0 bln for full year 2016. This is revised from $5.0 bln to $5.2 bln for full year 2016, a target adjusted from the earlier $6.0 bln to $6.2 bln to reflect the transfer of the rolling mill in Warrick, Indiana, to the future Alcoa Corporation; the impact of a tolling arrangement between Alcoa Corporation and Arconic for can body sheet at Tennessee Operations; and the updated impact for changes in both the London Metal Exchange aluminum price and foreign currency exchange rate assumptions versus 2013. The goal for adjusted EBITDA per metric ton remains unchanged at or above average historical highs of $344. 
  • Engineered Products and Solutions targets revenue of $5.6 billion to $5.8 billion for full year 2016, revised from $5.9 billion to $6.1 billion, and an adjusted EBITDA margin of approximately 21 percent, revised from 21 to 22 percent.
  • Transportation and Construction Solutions targets revenue of $1.7 billion to $1.8 billion, revised from $2.1 billion, and an adjusted EBITDA margin of approximately 15 percent, which remains unchanged.
• Global Rolled Products targets revenue of $4.8 bln to $5.0 bln for full year 2016. This is revised from $5.0 bln to $5.2 bln for full year 2016, a target adjusted from the earlier $6.0 bln to $6.2 bln to reflect the transfer of the rolling mill in Warrick, Indiana, to the future Alcoa Corporation; the impact of a tolling arrangement between Alcoa Corporation and Arconic for can body sheet at Tennessee Operations; and the updated impact for changes in both the London Metal Exchange aluminum price and foreign currency exchange rate assumptions versus 2013. The goal for adjusted EBITDA per metric ton remains unchanged at or above average historical highs of $344. 
• Engineered Products and Solutions targets revenue of $5.6 billion to $5.8 billion for full year 2016, revised from $5.9 billion to $6.1 billion, and an adjusted EBITDA margin of approximately 21 percent, revised from 21 to 22 percent.
• Transportation and Construction Solutions targets revenue of $1.7 billion to $1.8 billion, revised from $2.1 billion, and an adjusted EBITDA margin of approximately 15 percent, which remains unchanged.