Alcoa (NYSE: AA) reported mixed fiscal 2023 fourth-quarter results. While the revenues missed Zacks estimates, the earnings surpassed expectations. The aluminum giant also posted lower-than-anticipated EBITDA. The stock of Alcoa ended Thursday’s trading session at $26.75, down 1.58%, or $0.43, from the prior close. The stock has gained about 13.50% in the past three months but remains 49% below the price it traded at 12 months ago.
The Pittsburgh, Pennsylvania-based company reported fourth-quarter revenues of $2.60 billion, down from $2.66 billion in the corresponding quarter of fiscal 2023. The company pointed out that lower raw material and production costs and favorable currency impacts were partly negated by higher energy costs, primarily due to carbon dioxide compensation changes in Norway.
For the fourth quarter, which ended December 31, 2023, the bauxite products company reported a net loss that narrowed to $150 million, or $0.84 per share, from $395 million, or $2.24 per share, in the quarter ended December 31, 2022.
Excluding restructuring and other charges, other special items, discrete and other tax item impacts, tax impact on special items, and non-controlling interest impact, among others, the 4Q 2023 non-GAAP net loss was $100 million, or $0.56 per share, compared with a net loss of $144 million, or $0.82 per share, in 4Q 2022.
Wall Street analysts anticipated Alcoa to post a net loss of $0.84 per share on revenues of $2.61 billion.
Commenting on the quarterly performance, Alcoa President and CEO, William Oplinger, stated: “We are building on our positive momentum and implementing actions to drive improved profitability.”
In the latest quarter, adjusted EBITDA was $89 million, an increase from $29 million in the prior-year period. The Street analysts anticipated Alcoa’s EBITDA to be $110.70 million. Specifically, aluminum EBITDA (adjusted) was $88 million, an increase from $31 million in the year-ago period. However, the figure was below the $97.80 million anticipated by analysts.
The company’s free cash flow was $10 million at the end of Q4 2023, compared with a negative cash flow of $53 million at the end of Q4 2022. During the fourth quarter, Alcoa recorded production of 541,000 Mt, up 4.80% on a y-o-y basis, and surpassed forecasts of 537,183 Mt. The company returned $72 million to shareholders in the form of dividend payments. Alcoa had $944 million in cash at the end of the fourth quarter.
Looking ahead, in the first quarter of fiscal 2024, the Alumina division’s EBITDA is expected to record a negative impact of about $15 million, primarily due to maintenance costs and a decline in Australian shipments. The mixed quarterly results are expected to keep the stock of Alcoa range-bound in the near term.
The historical price chart indicates that the stock of Alcoa is declining after facing resistance at $28. The next support is anticipated to be only near $24. Additionally, the stock is trading below its 50-day moving average, while the stochastic indicator is descending toward the bearish zone. Therefore, we anticipate the stock price of Alcoa to remain in a downtrend in the days ahead.
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