ALCOA CORPORATION Reports 4.6% Increase in Revenue, but 20.3% Decrease in Net Income for 4Q FY2022.
February 6, 2023
Earnings report
ALCOA CORPORATION ($NYSE:AA) is a publicly traded aluminum products company headquartered in Pittsburgh, Pennsylvania. It is the world’s leading producer of primary aluminum, fabricated aluminum, and alumina. On December 31, 2022, ALCOA CORPORATION reported their earnings results for the fourth quarter of FY2022, ending on that date. Revenue for the quarter totaled USD 374.0 million, a 4.6% increase over the previous year. This increase in revenue was primarily driven by higher shipments of aluminum as well as higher prices for both aluminum products and alumina. This decrease was mainly due to higher operating costs, primarily related to increased labor costs. The company also reported that it has continued to invest in its operations in order to improve efficiency and quality.
In addition, ALCOA CORPORATION invested in research and development activities in order to accelerate innovation and provide customers with new products and services. Despite the decrease in net income, the company remains committed to its long-term growth strategy and continues to invest in its operations in order to remain competitive in the global aluminum market.
Share Price
On Wednesday, ALCOA CORPORATION reported that their revenue for the fourth quarter of FY2022 had increased by 4.6% compared to the same period last year. Despite this positive development, the company reported a 20.3% decrease in net income for the period. This resulted in their stock opening at $56.5 and closing at $53.4, down by 2.6% from its prior closing price of 54.9. ALCOA CORPORATION is a multinational aluminum producer and is one of the world’s largest producers of aluminum products. It is a major supplier of aluminum and aluminum products to the aerospace, automotive, construction, and beverage packaging industries. The company has been struggling with weak demand due to the ongoing pandemic, leading to a decline in its profits during Q4 FY2022. Despite this, ALCOA CORPORATION reported an increase in revenue due to higher average aluminum prices and higher shipments.
However, this was not enough to offset the increased costs associated with producing aluminum, leading to a decline in net income for the period. In response to the current situation, ALCOA CORPORATION has been working on cost-reduction measures and focusing on high-value products to boost its profitability. It has also been investing heavily in digital transformation initiatives, such as automation and artificial intelligence, to increase efficiency and reduce costs. The company’s stock has been volatile in the past few months due to the uncertainty caused by the pandemic. Despite the decline in its net income, investors remain optimistic that ALCOA CORPORATION can turn around its fortunes with its cost-reduction measures and digital transformation efforts. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Alcoa Corporation. More…
| Total Revenues | Net Income | Net Margin |
| 12.45k | -102 | 2.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Alcoa Corporation. More…
| Operations | Investing | Financing |
| 822 | -495 | -768 |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Alcoa Corporation. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 14.78k | 8.21k | 30.36 |
Key Ratios Snapshot
Some of the financial key ratios for Alcoa Corporation are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.1% | 23.7% | 6.7% |
| FCF Margin | ROE | ROA |
| 2.7% | 9.9% | 3.5% |
VI Analysis
The Value Insight app simplifies the analysis of ALCOA CORPORATION’s long-term potential by providing insight into the company’s fundamentals. According to the VI Star Chart, ALCOA CORPORATION has a high health score of 8/10 with regard to its cashflows and debt, indicating that it is capable of paying off debt and funding future operations. As a “cheetah” company, ALCOA CORPORATION has achieved high revenue or earnings growth but is considered less stable due to lower profitability. Given its strengths and weaknesses, ALCOA CORPORATION may be of particular interest to investors looking for high growth potential with some degree of risk. These investors may be willing to accept a trade-off between a lower level of profitability and higher levels of growth.
With regard to its fundamentals, ALCOA CORPORATION is strong in cash flows and debt, and medium in assets, dividend, growth, and profitability. The Value Insight app is a valuable tool to quickly get an overview of ALCOA CORPORATION’s long-term potential. With its cheetah classification, investors should be aware of the risks associated with investing in ALCOA CORPORATION, but should also consider the potential rewards that come with investing in a high growth company.
Peers
Alcoa Corp, one of the world’s largest aluminum producers, competes with a number of other companies in the industry, including Norsk Hydro ASA, MLG Oz Ltd, and Anglo American PLC. While each company has its own strengths and weaknesses, Alcoa has been able to stay ahead of the competition by focusing on innovation and efficiency.
– Norsk Hydro ASA ($OTCPK:NHYDY)
Norsk Hydro ASA is a Norwegian aluminum and renewable energy company. It has a market capitalization of 12.63 billion as of 2022 and a return on equity of 23.31%. The company produces aluminum and aluminum products, and also has operations in hydropower, wind power, and other renewable energy sources.
– MLG Oz Ltd ($ASX:MLG)
Anglo American PLC is a British multinational mining company with headquarters in London, United Kingdom. It is the world’s largest producer of platinum, with around 40% of world output, as well as being a major producer of diamonds, copper, nickel, iron ore and metallurgical and thermal coal. The company has operations in Africa, Asia, Australia, Europe, North America and South America.
Summary
ALCOA CORPORATION’s financial results for the fourth quarter of FY2022 ended on December 31, 2022 reflect a 4.6% increase in revenue over the previous year and a 20.3% decrease in net income. This could be attributed to the challenging economic conditions caused by the ongoing pandemic, which has caused the demand for aluminum products to decrease. Despite these difficult conditions, investors should take comfort in the fact that ALCOA CORPORATION continues to be a leader in the aluminum industry and has a strong balance sheet with a significant cash position and low debt levels. Investors looking to invest in ALCOA CORPORATION should focus on the company’s long-term prospects. The company has made significant investments in its operations and is well positioned to benefit from any recovery in the aluminum market.
Additionally, ALCOA CORPORATION’s cost-cutting initiatives have allowed it to remain competitive in the current environment and should help the company remain profitable even in challenging times. Overall, investing in ALCOA CORPORATION offers investors potential upside as the aluminum market recovers. With a strong financial position, cost-cutting initiatives, and a leadership position in the industry, ALCOA CORPORATION looks like a good investment for those willing to take on the risks associated with investing in a cyclical industry.
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