Alcoa Corp (NYSE: AA) reported a fourth-quarter net loss that narrowed from last year. The 4Q 2022 earnings surpassed Wall Street estimates. The world’s eighth largest aluminum manufacturer clarified that the performance was affected due to a difficult marketing environment, including high costs of raw materials (input) and energy in addition to low price for aluminum. The share price of Alcoa ended Thursday’s trading at $49.52, down $3.93 or 7.35% from the prior close.
The Pittsburgh, Pennsylvania-based company reported fourth-quarter revenues of $2.66 billion, down 20.30% from $3.34 billion in the comparable quarter of fiscal 2021.
For the fourth quarter ended December 31, 2022, Alcoa posted a net loss of $374 million, or $2.12 per share, compared with a net loss of $392 million, or $2.11 per share, in the fourth quarter ended December 31, 2021.
Excluding restructuring charges, other special items, discrete and other tax items, the tax impact on special items, and non-controlling interest impact, among others, the bauxite producer swung to a non-GAAP net loss of $123 million, or $0.70 per share, in Q4 2022 from a net profit of $475 million, or $2.50 per share, in Q4 2021.
Analysts surveyed by Thomson Reuters anticipated the company to report an adjusted net loss of $0.85 per share on revenues of $2.65 billion.
Commenting on the quarterly results, Alcoa President and CEO Roy Harvey, said “Last year, global turbulence negatively influenced costs for energy and raw materials, and we saw significant variance on product pricing between the first and second halves of 2022.”
At the end of the fourth quarter, Alcoa had a cash balance of $1.47 billion, including restricted funds of $111 million. Furthermore, free cash flow was negative $53 million.
Production in the alumina division fell by 2% to 3 million metric tons, mainly due to the partial decrease at the San Ciprián refinery. With regards to Aluminum, the company produced 516,000 tons, reflecting a sequential rise of 4% above the previous quarter’s output.
Alcoa ended 2022 with a working capital balance of $1.40 billion, up roughly $400 million from 2021.
Looking ahead, the company forecasts aggregate alumina shipments, to be between 12.70 million and 12.90 million metric tons, down 0.50 million metric tons from last year. Also, the aluminum division is forecast to deliver between 2.50 million and 2.60 million tons, almost unchanged from 2022.
The mixed quarterly results are expected to keep the stock of Alcoa bearish in the near term.
The historical price chart indicates that the stock of Alcoa is declining after facing resistance at 55. The next major support is anticipated only near 46. Additionally, the stochastic indicator is declining toward the bearish zone. Therefore, we can anticipate the stock to remain in a downtrend for the next few trading sessions.
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