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Arconic (ARNC) Beats Earnings & Revenue Estimates in Q3

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Arconic Inc. logged profits (as reported) of $161 million or 32 cents per share in the third quarter of 2018, up from $119 million or 22 cents in the year-ago quarter. Earnings per share beat the Zacks Consensus Estimate of 30 cents.

Arconic reported revenues of $3,524 million, up around 8.9% year over year, exceeding the Zacks Consensus Estimate of $3,484.3 million. Organic revenues rose 7% year over year, driven by higher volumes across the board on the back of growth in automotive, aerospace engines, defense and industrial, commercial transportation as well as building & construction markets.

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 $1.6 billion for the reported quarter, up 6% year over year. Organic revenues in the segment rose 6%, supported by growth in aerospace engines and defense.

Global Rolled Products: Revenues in the division amounted to $1.4 billion in the quarter, up 16% year over year. Organic revenues in the segment rose 9%, driven by higher industrial and automotive volume.

Transportation and Construction Solutions: Revenues in the segment amounted to $530 million, up 1% year over year. Organic revenues in the segment rose 8%, supported by higher volume in commercial transportation and building and construction.

Financial Position

As of Sep 30, 2018, Arconic had cash and cash equivalents of roughly $1,535 million, down around 15.4% year over year. Long-term debt fell roughly 7.2% year over year to $6,315 million.

Adjusted free cash flow nearly tripled year over year to $115 million in the quarter.

Outlook

Arconic provided an updated guidance for 2018. It now expects adjusted earnings in the range of $1.28-$1.34 per share, up from the prior expectation of $1.17-$1.27 per share. However, it continues to expect revenues for 2018 in the range of $13.7-$14 billion and adjusted free cash flow of roughly $250 million.

Price Performance

Arconic's shares lost 8.5% in the past three months compared with the industry’s 23.7% decline.

 



Zacks Rank & Stocks to Consider

Arconic currently carries a Zacks Rank #3 (Hold).

A few better-ranked stocks in the basic materials space are Methanex Corporation (MEOH - Free Report) , KMG Chemicals, Inc. and CF Industries Holdings, Inc. (CF - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Methanex has expected long-term earnings growth rate of 15%. Its shares have rallied 35.2% in the past year.

KMG Chemicals has expected long-term earnings growth rate of 28.5%. Its shares have rallied 35.6% in the past year.

CF Industries has expected long-term earnings growth rate of 6%. Its shares have gained 16.9% in a year.

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