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Arconic (ARNC) Beats Earnings & Revenue Estimates in Q4
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Arconic Inc. logged profits (as reported) of $218 million or 44 cents per share in fourth-quarter 2018, against a net loss of $727 million or $1.51 per share in the prior-year quarter.
Barring one-time items, adjusted earnings per share (EPS) came in at 33 cents and beat the Zacks Consensus Estimate of 30 cents.
Revenues improved around 6.1% year over year to $3,472 million and surpassed the Zacks Consensus Estimate of $3,412.3 million.
Organic revenues rose 10% year over year on the back of higher volumes across all businesses, including double-digit growth in most major end markets.
2018 Highlights
In 2018, total revenues increased 8% year over year to $14 billion and organic revenues rose 7%.
Net income came in at $642 million or $1.30 per share, against a net loss of $74 million 28 cents per share.
Engineered Products and Solutions (EP&S): Revenues in the division totaled $1.6 billion for the reported quarter, up 8% year over year. Organic revenues in the segment rose 9%, supported by volume growth in aerospace engines and defense.
Global Rolled Products (GRP): Revenues in the division amounted to $1.4 billion in the quarter, up 9% year over year. Organic revenues in the segment rose 13%.
Transportation and Construction Solutions (TCS): Revenues in the segment amounted to $497 million, down 6% year over year. Organic revenues in the segment rose 4%.
Financial Position
As of Dec 31, 2018, Arconic had cash and cash equivalents of roughly $2,277 million, up around 5.9% year over year. Long-term debt fell roughly 13.4% year over year to $5,896 million.
Adjusted free cash flow in 2018 nearly tripled year over year to $465 million.
Outlook
Arconic provided guidance for full-year 2019. The company expects revenues in the range of $14.3-$14.6 billion. Adjusted EPS are projected in the band of $1.55-$1.65. Adjusted free cash flow is projected between $400 million and $500 million.
Portfolio Review Update
Arconic stated that its portfolio will be separated into Engineered Products & Forgings and Global Rolled Products. The company is considering the sale of businesses that do not fit into Engineered Products & Forgings or Global Rolled Products.
Price Performance
Arconic's shares have lost 27.7% in the past year compared with the industry’s 28.2% decline.
Rio Tinto has an expected earnings growth rate of 5.1% for 2019. The company’s shares have moved up 7.7% in the past year.
Mosaic has an expected earnings growth rate of 24% for 2019. Its shares have rallied 30.2% in a year’s time.
Israel Chemicals has an expected earnings growth rate of 11.1% for 2019. Its shares have improved 38.6% in a year’s time.
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 (ARNC) Beats Earnings & Revenue Estimates in Q4
Arconic Inc. logged profits (as reported) of $218 million or 44 cents per share in fourth-quarter 2018, against a net loss of $727 million or $1.51 per share in the prior-year quarter.
Barring one-time items, adjusted earnings per share (EPS) came in at 33 cents and beat the Zacks Consensus Estimate of 30 cents.
Revenues improved around 6.1% year over year to $3,472 million and surpassed the Zacks Consensus Estimate of $3,412.3 million.
Organic revenues rose 10% year over year on the back of higher volumes across all businesses, including double-digit growth in most major end markets.
2018 Highlights
In 2018, total revenues increased 8% year over year to $14 billion and organic revenues rose 7%.
Net income came in at $642 million or $1.30 per share, against a net loss of $74 million 28 cents per share.
Arconic Inc. Price, Consensus and EPS Surprise
Arconic Inc. Price, Consensus and EPS Surprise | Arconic Inc. Quote
Segment Highlights
Engineered Products and Solutions (EP&S): Revenues in the division totaled $1.6 billion for the reported quarter, up 8% year over year. Organic revenues in the segment rose 9%, supported by volume growth in aerospace engines and defense.
Global Rolled Products (GRP): Revenues in the division amounted to $1.4 billion in the quarter, up 9% year over year. Organic revenues in the segment rose 13%.
Transportation and Construction Solutions (TCS): Revenues in the segment amounted to $497 million, down 6% year over year. Organic revenues in the segment rose 4%.
Financial Position
As of Dec 31, 2018, Arconic had cash and cash equivalents of roughly $2,277 million, up around 5.9% year over year. Long-term debt fell roughly 13.4% year over year to $5,896 million.
Adjusted free cash flow in 2018 nearly tripled year over year to $465 million.
Outlook
Arconic provided guidance for full-year 2019. The company expects revenues in the range of $14.3-$14.6 billion. Adjusted EPS are projected in the band of $1.55-$1.65. Adjusted free cash flow is projected between $400 million and $500 million.
Portfolio Review Update
Arconic stated that its portfolio will be separated into Engineered Products & Forgings and Global Rolled Products. The company is considering the sale of businesses that do not fit into Engineered Products & Forgings or Global Rolled Products.
Price Performance
Arconic's shares have lost 27.7% in the past year compared with the industry’s 28.2% decline.
Zacks Rank & Stocks to Consider
Arconic currently carries a Zacks Rank #4 (Sell).
A few better-ranked stocks in the basic materials space include Rio Tinto plc (RIO - Free Report) , The Mosaic Company (MOS - Free Report) and Israel Chemicals Ltd (ICL - Free Report) . While Rio Tinto currently sports a Zacks Rank #1 (Strong Buy), Mosaic and Israel Chemicals carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Rio Tinto has an expected earnings growth rate of 5.1% for 2019. The company’s shares have moved up 7.7% in the past year.
Mosaic has an expected earnings growth rate of 24% for 2019. Its shares have rallied 30.2% in a year’s time.
Israel Chemicals has an expected earnings growth rate of 11.1% for 2019. Its shares have improved 38.6% in a year’s time.
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 >>