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Engineered Products and Solutions: Revenues from the division came in at $1.5 billion for the first quarter, up 4% year over year. Organic revenues for the segment rose 2% supported by growth in aerospace engines, defense and industrial, which more than offset the continued slump in the industrial gas turbine market and challenges in aerospace airframe production mix, related to fastening systems.
Operating profit for the segment fell 10.5% year over year owing to unfavorable product mix, higher input costs and performance shortfalls in Rings and Disks, which more than offset the strength in aerospace engines.
Global Rolled Products: The division recorded sales of $1.4 billion in the quarter, up 9% year over year.
Operating profit for the segment, however, declined 17.6% year over year due to unfavorable aerospace wide-body production mix and higher aluminum prices, partly offset by higher automotive volume.
Transportation and Construction Solutions: The segment logged sales of $537 million, up 18% year over year.
Operating profit was down 1.4% as favorable foreign currency swings, higher volume in commercial transportation and building and construction and net cost savings were more than offset by unfavorable product price and mix and higher aluminum prices.
Financial Position
Arconic ended the first quarter with cash and cash equivalents of roughly $1,205 million, down around 52.8% year over year.
Long-term debt fell 21.6% year over year to $6,309 million.
Outlook
Arconic provided updated full-year 2018 guidance. The company now expects revenues for 2018 in the range of $13.7 billion to $14 billion (up from $13.4-$13.7 billion projected earlier). It now expects adjusted earnings to be in the range of $1.17-$1.27 per share (down from $1.45-$1.55) and free cash flow to be around $250 million (down from prior guidance of roughly $500 million).
Price Performance
Shares of Arconic have lost 25.4% in the last three months, significantly underperforming the industry’s 8.5% decline.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 23.9% over a year.
U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 47.6% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 30.5% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Arconic's (ARNC) Earnings and Sales Beat Estimates in Q1
Arconic Inc. reported net income of $143 million or 29 cents per share for the first quarter of 2018, down from $322 million or 65 cents a year ago.
Barring one-time items, adjusted earnings came in at 34 cents per share for the reported quarter, which beat the Zacks Consensus Estimate of 32 cents.
Arconic reported revenues of $3,445 million, up around 7.9% year over year, which surpassed the Zacks Consensus Estimate of $3,329.6 million.
Arconic Inc. Price, Consensus and EPS Surprise
Arconic Inc. Price, Consensus and EPS Surprise | Arconic Inc. Quote
Segment Highlights
Engineered Products and Solutions: Revenues from the division came in at $1.5 billion for the first quarter, up 4% year over year. Organic revenues for the segment rose 2% supported by growth in aerospace engines, defense and industrial, which more than offset the continued slump in the industrial gas turbine market and challenges in aerospace airframe production mix, related to fastening systems.
Operating profit for the segment fell 10.5% year over year owing to unfavorable product mix, higher input costs and performance shortfalls in Rings and Disks, which more than offset the strength in aerospace engines.
Global Rolled Products: The division recorded sales of $1.4 billion in the quarter, up 9% year over year.
Operating profit for the segment, however, declined 17.6% year over year due to unfavorable aerospace wide-body production mix and higher aluminum prices, partly offset by higher automotive volume.
Transportation and Construction Solutions: The segment logged sales of $537 million, up 18% year over year.
Operating profit was down 1.4% as favorable foreign currency swings, higher volume in commercial transportation and building and construction and net cost savings were more than offset by unfavorable product price and mix and higher aluminum prices.
Financial Position
Arconic ended the first quarter with cash and cash equivalents of roughly $1,205 million, down around 52.8% year over year.
Long-term debt fell 21.6% year over year to $6,309 million.
Outlook
Arconic provided updated full-year 2018 guidance. The company now expects revenues for 2018 in the range of $13.7 billion to $14 billion (up from $13.4-$13.7 billion projected earlier). It now expects adjusted earnings to be in the range of $1.17-$1.27 per share (down from $1.45-$1.55) and free cash flow to be around $250 million (down from prior guidance of roughly $500 million).
Price Performance
Shares of Arconic have lost 25.4% in the last three months, significantly underperforming the industry’s 8.5% decline.
Zacks Rank & Stocks to Consider
Arconic currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Steel Dynamics, Inc. (STLD - Free Report) , United States Steel Corporation (X - Free Report) and Kronos Worldwide Inc. (KRO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 23.9% over a year.
U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 47.6% over a year.
Kronos has an expected long-term earnings growth rate of 5%. Its shares have surged 30.5% over a year.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>