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Sep 30, 2020
Alcoa Q3 2020 Earnings Report
Alcoa's results for Q3 2020 reflected improved pricing for alumina and aluminum, continued operational excellence, and a strong cash position.
Key Takeaways
Alcoa Corporation reported improved financial results in Q3 2020, driven by higher aluminum and alumina prices and increased sales of value-add aluminum products. The company generated $158 million in cash from operations and $84 million in free cash flow. Alcoa ended the quarter with a cash balance of $1.74 billion.
Generated $158 million in cash from operations and $84 million free cash flow.
Set new production records for Alcoa operated mines and refineries.
Grew cash balance to $1.74 billion, including the proceeds from a $750 million debt issuance.
Realized an 11 percent sequential increase in sales volume of value-add products due to improving customer demand in the aluminum segment.
Revenue by Segment
Forward Guidance
In the fourth quarter of 2020, Alcoa expects flat sequential quarterly results in the Bauxite segment. In the Alumina segment, the Company expects lower sequential quarterly results primarily from higher energy costs and a change in the mix of customer shipments. In the Aluminum segment, the Company expects a sequential decline with anticipated higher power costs in Europe, a full quarter of Section 232 tariffs, and higher maintenance and seasonal labor costs, partially offset by the positive impact of the Intalco curtailment for a full quarter. The fourth quarter 2020 operational tax expense is expected to be significantly lower than 3Q and approximate $25 million based on recent pricing.
Challenges Ahead
- In the Alumina segment, the Company expects lower sequential quarterly results primarily from higher energy costs and a change in the mix of customer shipments.
- In the Aluminum segment, the Company expects a sequential decline with anticipated higher power costs in Europe, a full quarter of Section 232 tariffs, and higher maintenance and seasonal labor costs, partially offset by the positive impact of the Intalco curtailment for a full quarter.
- Flat sequential quarterly results in the Bauxite segment
- The COVID-19 pandemic is ongoing, and its magnitude and duration continue to be unknown.
- The uncertainty around its future impact on the Company’s business, financial condition, operating results, and cash flows could cause actual results to differ from this outlook.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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