AA

- Interested in Alcoa? Here are five stocks we like better. - Alcoa beat Q3 2026 earnings expectations with adjusted EPS of $1.82, versus a $1.51 consensus, while generating its strongest free cash flow of the year. - The Pinjarra refinery instability that caused a $96 million Alumina segment loss in Q2 has stabilized, narrowing the loss to just $1 million in Q3. - Despite aluminum segment EBITDA falling from a record $1.07 billion to $862 million, margins remain near historic highs, yet Alcoa shares still trade near their lows. Alcoa Corp. (NYSE: AA) stock has been cut nearly in half since its spring peak. Shares traded near $77 in May and were trading near $40 prior to the company's Q3 2026 earnings report, which the company delivered after the market closed on Oct. 15. That kind of drawdown usually signals a broken business or a collapsing commodity. Alcoa has neither. Aluminum prices have cooled from their spring highs, but they have not followed the stock down. Alcoa's average realized aluminum price fell about 5% from the second quarter to the third. AA shares fell roughly ten times that. → Berkshire Just Backed This Little-Known Stock—Should You Chase It? That gap set up the real question that Alcoa needed to answer with its report. Had the market confused a temporary operational problem with a peak in the aluminum cycle? The operational problem is real. Instability at the Pinjarra refinery in Australia pushed the Alumina segment to a $96 million EBITDA loss in Q2. Add July's earnings miss, and the "peak earnings" story writes itself. → These 3 Green Stocks Have a Growth Story That Goes Far Beyond Washington The Q3 report provided a bullish rebuttal. Pinjarra is stable again. Aluminum margins remain near record levels. And Alcoa beat earnings expectations while producing its strongest free cash flow of the year. Alumina production jumped 11% sequentially to 2.5 million metric tons. Management credited improved stability at Pinjarra. Segment EBITDA improved to a loss of just $1 million. That's a $95 million swing in one quarter. → Broadcom's CEO Sees Years of AI Demand But Warns of a Bigger Threat to the Boom Costs fell. Adjusted operating cost per ton of alumina dropped to $354 from $368. This came while realized alumina prices rose to $353 per ton from $334. This is evidence of a temporary problem that is in the process of resolving itself. Management expects Alumina performance to hold steady in Q4 rather than slip back. Aluminum segment EBITDA fell to $862 million from Q2's record $1.07 billion. Bears will point to that decline. But context matters. Two factors drove most of the drop. Realized aluminum prices slipped to $4,527 per ton from $4,752. Shipments fell 5% after Q2 volumes were inflated by inventory moves from Q1. Additionally, higher carbon costs added pressure. Viewed from that lens, this doesn't look like a cycle rolling over. Q3 aluminum EBITDA was still nearly triple the $307 million from a year ago. The segment kept a margin above 28% of third-party sales. Production kept climbing, too. Aluminum output rose for the sixth straight quarter to 649,000 metric tons. The Alumar smelter restart in Brazil is complete. Five smelters and one refinery set year-to-date production records. Adjusted earnings per share (EPS) came in at $1.82, ahead of the $1.51 consensus. GAAP EPS rose to $1.81 from $1.53 in Q2. A year ago, adjusted EPS was a 2-cent loss. Cash flow tells the same story. Operating cash flow was $643 million. Free cash flow reached $472 million, up from $422 million in Q2. A year ago, free cash flow was negative. The balance sheet is ready for the AliGroup acquisition. Alcoa holds $4.4 billion in cash after a $2.6 billion bond sale. Net debt is just $414 million. South32 shareholders approved the deal on report day. Closing is expected in the first half of 2027. So why is the stock still near its lows? Partly because the market prices aluminum stocks on the next move in metal, not the last quarter. Q4 guidance does carry modest headwinds. Management sees about $30 million in higher raw material and maintenance costs in Aluminum. Higher alumina input costs should add another $30 million. Interest expense is also rising after the bond deal. Those are real, but small against an $862 million quarterly segment result. Management also expects higher production and shipments in both segments in Q4. The chart reflects exhausted selling more than new information. Shares sit below a declining 50-day moving average near $47. AA bounced nearly 5% the morning after earnings. This pushed the 14-day RSI out of oversold territory, where it was before the report. The bull case doesn't require aluminum to rally. It requires aluminum to stay elevated while Alcoa's operations keep improving. Q3 delivered both. The risk is a further slide in metal prices. LME moves flow directly through the Aluminum segment. A sharp drop would validate the market's peak-cycle read. But this report points the other way. The operational issue behind the sell-off is resolved. Margins remain near historic highs. And the stock is priced as if neither were true. That disconnect is the opportunity. The market sold Alcoa on a refinery problem and cycle fears. The quarter fixed the refinery. The cycle hasn't turned. The article "Alcoa Beat Earnings, But Can It Escape the Aluminum Bears?" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.

Alcoa stock climbed 2.6% to US$41.45 after the Q3 2026 report, a welcome bounce for investors who had just watched a 10% slide over the past month. On the surface, the headline looks simple. The company delivered Q3 basic earnings per share of US$1.83 on US$3.7b of revenue, with net income of US$483m. The real story sits on the balance sheet and valuation. Trailing earnings include a US$672m one off gain, yet the P/E multiple still sits near 7x and a discounted cash flow model points to a value well above the current quote. Short term traders reacted to the print, while long term holders are staring at a very different set of numbers. Love Alcoa's low P/E and recent earnings strength but worried about one off boosts distorting the picture? Compare it with a curated set of resilient balance sheet plays in our list of solid balance sheet and fundamentals stocks (25 results). - Revenue (Q3 2026 vs. Q3 2025): US$3,704m vs. US$2,995m (up about 23.7%) - Net Income (Excl. Extra Items, Q3 2026 vs. Q3 2025): US$483m vs. US$229m (up about 111.0%) - Basic EPS (Q3 2026 vs. Q3 2025): US$1.83 vs. US$0.88 (up about 107.0%) - Aluminum Production (Q3 2026 vs. Q3 2025): 649 kt vs. 579 kt (up about 12.1%) Earnings tell part of Alcoa's story, but investors who care about what they are paying for the business usually put more weight on the cash flowing through the company. On those cash flows alone, Alcoa's stock could be a hefty 39% undervalued. The bullish story centers on Alcoa using low carbon metal and new technology to pursue better pricing and potentially sturdier profitability. "Alcoa's accelerating investments in its proprietary ELYSIS low-carbon smelting process and other "green aluminum" initiatives could allow it to capture premium pricing and large volumes from ESG-focused customers, unlocking significant long-term margin expansion and a higher quality of earnings." Q3 results show part of that setup beginning to emerge. Production is at record year-to-date levels and the Alumar restart is complete, which strengthens the platform needed for any potential premium volume. The new gallium project at Wagerup adds another low carbon, energy transition angle. Pricing evidence is thinner. Management highlighted EBITDA and cash generation, yet did not point to measurable green premia or clear ELYSIS commercialization milestones, so any margin uplift in the thesis is not visible in current reported numbers. The price and this Narrative do not agree. → Uncover what this Narrative says Alcoa is actually worth. The bearish view argues that Alcoa is stuck with rising regulatory and energy burdens that it cannot offset through pricing or flexibility. "Alcoa's exposure to raw material and energy cost volatility remains acute, with ongoing high bauxite prices due to geopolitical disruptions in Guinea and continued elevated energy costs. Its ability to pass these cost increases to customers is increasingly limited by competitive and contractual constraints, resulting in structurally lower net margins and more frequent earnings shortfalls." Q3 adjusted EBITDA of US$789m, robust free cash flow of US$472m and higher alumina pricing do not show the margin collapse this quote implies. Cost pressure is visible in higher carbon charges and earlier caustic spikes, yet record year to date production and maintained full year volume guidance indicate operations are absorbing these headwinds for now. Alcoa just reminded investors how quickly a single quarter can reshape sentiment. The real opportunity is finding stocks that could be undervalued before the market corrects them. - Company 1 - 39% below our estimate - helps merchants move money as transaction volumes extend into new channels and services. - Company 2 - 43% below our estimate - scales a premium teahouse network as store additions and membership programs influence loyalty and spending. - Company 3 - 26% below our estimate - sells injectable treatments for weight loss and diabetes as key prescriptions shape demand for patients. That is three of the list. See all 33 potentially undervalued companies → This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AA. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Image source: The Motley Fool. Thursday, Oct. 15, 2026 - Senior Vice President of Treasury and Capital Markets - Louis Langlois - President and Chief Executive Officer - William Oplinger - Executive Vice President and Chief Financial Officer - Molly Beerman Operator: Good afternoon, and welcome to the Alcoa Corporation Third Quarter 2026 Earnings Presentation and Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Louis Langlois, Senior Vice President of Treasury and Capital Markets. Please go ahead. Louis Langlois: Thank you, and good day, everyone. I'm joined today by William Oplinger, Alcoa Corporation President and Chief Executive Officer; and Molly Beerman, Executive Vice President and Chief Financial Officer. We will take your questions after comments by Bill and Molly. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation and in our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation. For historical non-GAAP financial measures, reconciliation to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures for reasons noted on this slide. Any reference in our discussion today to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website. Now I'd like to turn over the call to Bill. William Oplinger: Thank you, Louis, and welcome to our third quarter 2026 earnings conference call. Before discussing our results, I want to address the tragic fatality that occurred on September 16 at our Alumar smelter in Brazil. The loss of one of our colleagues has deeply affected all of us at Alcoa, and our thoughts remain with his family, friends and coworkers. We are a company grounded in our values, act with integrity, operate with excellence, care for people and lead with courage. Safety is fundamental to our values, and it guides how we run our business. There is no production target, financial result or business objective that is more important than ensuring every employee and contractor returns home safely every day. Over many years, we have strengthened our safety systems and dedicated significant resources to improving safety performance. Those efforts have resulted in meaningful progress in many areas of our business. But when we lose a colleague, progress is not enough. I am personally committed to ensuring we learn from this event and take the actions necessary to strengthen our safety culture, reduce risk across our operations and hold ourselves accountable to the highest safety standards. This tragedy reinforces that safety requires relentless focus, constant vigilance and an unwavering commitment from every one of us every day. With that commitment firmly in mind, I'll now turn to our third quarter results. We continue to build operational momentum and delivered strong third quarter performance. We achieved 6 year-to-date production records, increased aluminum production by approximately 15,000 metric tons sequentially, completed the Alumar smelter restart and delivered a significant performance recovery at the Pinjarra refinery. Together, these results demonstrate improving stability and disciplined execution across the portfolio. We reached a definitive agreement for the sale of a portion of the Massena East site with potential cash proceeds of up to $315 million. We expect to receive the first $50 million to $65 million at closing, which is anticipated within 6 months, subject to customary permitting, regulatory approvals, key development and closing conditions. We expect to receive the remaining cash consideration before the end of the decade, although the agreement provides up to 7 years for commissioning. This is the first transaction supporting our target to generate $500 million to $1 billion from asset monetization by 2030. The AliGroup acquisition continues to advance. The asset's strong first half 2026 performance reinforces our confidence in the strategic and financial rationale for the transaction. South32 shareholders approved the transaction, bringing us another step closer to our expected closing in the first half of 2027. Let me now provide an update on our progress toward transaction closing. Since announcing the AliGroup acquisition on June 30, we have made meaningful progress towards closing. In September, we completed the $2.6 billion debt financing and canceled the bridge facility. Completing the financing early reduced execution risk and provides certainty around funding the cash consideration. We estimate that the locked box value was more than $300 million at the end of the quarter based on publicly available information, including production guidance provided by South32. The regulatory approval process is progressing well across the relevant jurisdictions. Earlier this month, I met with President Ramaphosa and other key stakeholders in South Africa. Our engagement with stakeholders has been positive, and we remain confident in securing the required approvals to meet our expected first half of 2027 closing time line. Our transition and integration teams are actively preparing for ownership of the assets. This work spans the organization and is focused on maintaining operational continuity, positioning us to capture the value of the combined portfolio and ensuring we are ready to execute following closing and beginning delivering synergies and broader benefits of the transaction. Until then, the businesses will continue to operate independently. Now I'll turn it over to Molly to review the financial results. Molly Beerman: Thank you, Bill. Third quarter revenue was $3.7 billion, with the sequential change primarily reflecting lower metal prices. In the Alumina segment, third-party revenue increased by 7% to $680 million, resulting from higher realized alumina prices and higher alumina shipping volumes. In the Aluminum segment, third-party revenue was $3 billion, primarily reflecting lower metal prices and normalized shipment levels following the second quarter's inventory repositioning, partially offset by higher value-add product premiums. Third quarter net income attributable to Alcoa was $483 million versus the prior quarter of $407 million with earnings per common share increasing to $1.81 per share. On an adjusted basis, net income attributable to Alcoa remained strong at $485 million compared with $562 million in the second quarter. Let's discuss the factors affecting adjusted EBITDA. Adjusted EBITDA was $789 million as strong operational performance and higher alumina prices partially offset lower metal prices. The Alumina segment adjusted EBITDA increased $95 million on higher realized alumina prices and improved operational performance at Pinjarra as we regained stability in the third quarter. The Aluminum segment continued to deliver productivity gains, including higher molten production, improved stability and disciplined cost performance. These benefits were more than offset by the impact of lower metal prices, lower shipments and higher carbon costs, resulting in segment adjusted EBITDA of $862 million. Moving to cash flow activities for the third quarter of 2026. We ended the third quarter with a cash balance of $4.4 billion, which includes $2.6 billion of cash proceeds from the bond issue completed in September. Together with cash on hand, the net proceeds from the bond issue will be used to fund the $3.1 billion cash consideration for the AliGroup acquisition at closing. Securing the financing now avoids access and pricing risks in a volatile bond market. The quantum issue also reflects the strength of our balance sheet and cash position, resulting from consecutive quarters of robust free cash flow generation. In the third quarter, cash from operations was $643 million and free cash flow was $472 million, supported by strong EBITDA in the Aluminum segment, where the company was able to deliver metal prices to the bottom line. Turning to our key financial metrics for the third quarter and year-to-date 2026. Return on equity through the first 9 months of 2026 was 25.3%. Year-to-date, we have returned $80 million in cash to shareholders through our regular quarterly dividend. The company generated free cash flow of approximately $600 million in the first 9 months of the year. As we look toward closing the AliGroup acquisition, our strengthened balance sheet, secured financing and substantial cash position provide ample capacity to fund the transaction. This is the result of disciplined capital allocation, strong cash generation and consistent operating performance. Moving on to the outlook. For the full year outlook shown here, we have made only minor adjustments for transformation expenses, depreciation, interest expense and capital expenditures. For the fourth quarter, we continue to expect strong operating performance across both segments, continuing the momentum from the third quarter. We are expecting higher production and shipments in both segments as the improved refining system stability is maintained and the smelting portfolio continues to deliver productivity through incremental output and cost discipline. While we expect some higher direct input costs from elevated market prices and planned maintenance to support continued operational stability, the underlying performance remains very strong headed into the final quarter of the year. Please refer to the business considerations on Slide 34 of this presentation for additional details on the fourth quarter outlook. Now I'll turn it back to Bill. William Oplinger: Thanks, Molly. In alumina, the market tightened outside China during the quarter with the API increasing sequentially to approximately $370 per metric ton. We expect further tightening in the fourth quarter and into 2027, driven by announced curtailments and project delays and uncertainty in Indonesia around new supply additions. At the same time, recovering alumina production in the Middle East and continued smelter ramp-ups in Indonesia should support additional alumina demand. While the timing of some capacity coming online remains uncertain, the overall market condition is constructive. China remains well supplied from within the region as new refinery capacity has increased production and inventories. This continues to create a clear divergence between softer market conditions in China and tightening fundamentals outside China. Bauxite prices also increased sequentially with CIF China pricing reaching approximately $73 per dry metric ton. The increase was driven primarily by higher freight costs. For Alcoa, strengthening alumina market conditions and improved operational execution create meaningful upside. Our focus remains on operating our refineries safely and reliably, sustaining the recent performance improvement at Pinjarra and maintaining disciplined cost management. Moving on to aluminum. Aluminum prices moderated from recent highs but remains supported by constructive market fundamentals. On the supply side, production is gradually recovering as Middle East smelters restart and Indonesian capacity ramps up. The timing of a full recovery to pre-conflict production levels in the Middle East remains uncertain. Global aluminum inventories remain historically low at approximately 42 days of consumption, leaving the market with limited capacity to absorb further supply disruptions or stronger-than-expected demand. The Midwest, Rotterdam and Japan regional premiums have moderated from elevated levels but remain supported by low inventories and regional deficits. This tightness is particularly relevant in North America and Europe, both of which remain structurally short of metal. For Alcoa, our regional presence, reliable supply and differentiated product portfolio are important elements of our commercial value proposition. Our order book remains solid with significantly less volume available for sale than at this point last year. Most products are sold out or tightly committed. Packaging and electrical markets continue to lead demand. Transportation remains resilient and construction, particularly in Europe, remains the softest end market. Customer sentiment is cautious but constructive with continued interest in secure supply and long-term agreements. Before we wrap up, I'd like to return to the 3 priorities we set at Investor Day nearly a year ago. First, operational excellence. As I stated at the top of our call, safety remains our top priority and the foundation of operational excellence. We are strengthening critical risk controls, leadership behaviors and accountability. We are delivering greater stability across the portfolio, setting production records and improving productivity. We have now completed the restarts of both the San Ciprian and Alumar smelters. While the Western Australia EPA's review of our mine plan continues to advance, we are preparing our teams to execute the upcoming mine moves. The mining approvals are taking longer than expected. Several steps remain, including the appeals process and final ministerial decisions, and we now expect the process to extend into 2027. Our confidence in ultimately securing the approvals has not changed. We have incorporated an additional 6 months of mining in current areas into our plans and approvals by mid-2027 are not expected to further materially affect supply, quality or cost. We also have contingency plans available if needed. Second, value-creating growth. At Investor Day, we were clear that we would pursue growth only where we see a compelling path to long-term shareholder value. The AliGroup acquisition reflects that discipline, and we will apply the same standard to any future opportunities. We will not pursue growth for growth's sake. Third, disciplined capital allocation. We ended the third quarter with a strong balance sheet, supported by robust year-to-date free cash flow. We structured the AliGroup consideration such that pro forma leverage approximates a manageable 1.5x. Following closing of the acquisition, delevering will be our priority. We expect to use various sources of cash such as free cash flow generation, locked box cash from the transaction, proceeds from additional transformation asset sales and the monetization of our Ma'aden shares to reduce debt over time. Given the stronger through-cycle cash flow generation of the combined portfolio, we will update our adjusted net debt target at the transaction closing. The Massena East agreement also represents meaningful progress against our asset monetization strategy. These actions demonstrate that we are executing the strategy we presented at Investor Day and strengthening Alcoa for long-term value creation. To wrap up, we are proud of what we accomplished in the third quarter, excited about the opportunities ahead and confident in our ability to deliver value for our shareholders. With that, operator, please begin the Q&A session. Operator: [Operator Instructions] And our first question comes from Carlos De Alba with Morgan Stanley. Carlos de Alba: So the first question that I have is on the guidance. So maybe flat alumina, it's a little bit surprising to us given what we believe has been higher spot prices in recent months. And I know there is some lagging effects there, but that was a little bit of a surprise to us. Maybe could you explain if there are any cost pressures that may be behind this offsetting some of the improved top line? Molly Beerman: So, Carlos, our guidance of flat refers just to our performance elements and not the market. If you look at our Alumina segment, there are a couple of puts and takes. We have some maintenance moving between regions, but that is completely covered by our improved shipment performance. So overall, the performance elements are net of nothing. So flat and consistent with the strong performance in the third quarter. Carlos de Alba: And then... William Oplinger: Just so it's clear, Carlos, it doesn't include -- the guidance doesn't include pricing, right? So if prices get better during the course of the quarter, and they're better today than they were a quarter ago, it will flow through. Carlos de Alba: Right. Okay. Yes. I don't confuse them. We're not looking at the consensus and our estimates, this will happen. But okay, that makes sense. Then just I was curious to see aluminum production higher in the third quarter, but your aluminum shipments being a little bit lower. Was there any inventory buildup, any delays in shipments that maybe you will catch up a little bit more in this current quarter? Any color there would be great. Molly Beerman: So Carlos, remember, in the second quarter, we sold the inventory that we had repositioned in the first quarter. So that was about 30,000 metric tons. So that did not repeat in the third quarter. But we had a strong third quarter in terms of shipments other than that repositioning that did not recur. Operator: The next question will come from Timna Tanners with Wells Fargo. Timna Tanners: I think it's appropriate to touch base about the potential carve-out on aluminum prices or aluminum tariffs for Canada because that happened during the quarter, and it would be great to get your take on anything you know about whether or not that's still in discussions and what that could mean for Alcoa? William Oplinger: Thanks, Timna. We don't know what discussions are going on between the U.S. and Canada. We've offered support to both governments to provide data and information to help them come to a conclusion on any discussion that may be going on. What really matters is whether the U.S. will remain short, right? And if Canada were completely carved out or if Canada had a lower tariff, we believe that still the marginal ton will come from outside of North America. And therefore, the Midwest premium still should remain strong. But at this point, it's just speculation. Timna Tanners: Okay. Fair. And I also wanted to get your take on how you get comfortable with the Indonesian ramp-up that you alluded to. Some of the forecast is for some pretty aggressive volume increases. Does Indonesian government seem to be aware of the risk to the aluminum price like what they saw with the nickel price in the last several years. What's your take on the additional supply and how much could come on in Indonesia and what time frame? And it would be great to get also your latest thinking on China producing over its self-imposed cap on aluminum as well. William Oplinger: Okay. Yes. So a lot of questions baked in there. When I look at the rest of this year, 2026, we've actually seen strength of alumina pricing due to the ramp-up of the smelters and the return of some of the capacity in the Middle East. So that's actually a positive for us. In January, we'll give you a better view of what our full year supply-demand picture looks like. But to give you a little bit of a highlight, we are thinking that we are going to see probably 1.5 million metric tons of smelting capacity come online in Indonesia next year. On a 75 million metric ton market, that's -- it's a material number, but we think that the market will be able to absorb it. And then you asked about the China cap. The Chinese smelters, it feels as if the China cap is more of a policy tool to set a limit than a firm cap in that they're allowing some of the Chinese smelters to creep a little bit but not a massive jump in capacity. So for instance, we're seeing China capacity being -- or production being around 45.8 million metric tons in 2026. That's 400,000 tons over than the nominal cap level. But it seems that they're holding from a capacity side and allowing maybe a little bit of production creep. Operator: The next question will come from Nick Giles with B. Riley. Nick Giles: The aluminum equities as a whole have been under significant pressure. And so Bill, I was just curious where in terms of capital allocation, share repurchases would stand at this point. William Oplinger: So we're going to -- and Nick, thanks for the question. We're pursuing the closure of the South32 AliGroup transaction in the first half of next year. Clearly, we went out and raised debt in order to be able to pay the cash component of that. Recognize the fact that cash component of that is $3.1 billion. We only raised $2.6 billion because we're going to use some of the cash from the balance sheet. We will get that deal -- we anticipate getting that deal closed in the first half. And then the priority after that closure will be rapid -- and clearly, the cash generation that we are seeing today will allow us to delever rather quickly. We alluded to the fact that we think there's $300 million of cash in the lockbox. That will certainly go into the cash consideration. But at this point, the target is delevering. Nick Giles: Understood. No, I appreciate that perspective, Bill. My second question was, you made a comment about the WA EPA approvals being pushed out by 6 months and that there were some contingencies baked in there. I was hoping you could expand on what those contingencies were and what you would do in case that drags on further? William Oplinger: So the contingencies are clearly that we are resequencing and modifying our mining activities. We're looking at different production schedules and really going to continue to dig in the mines that we're in, and we feel confident that we will not have a negative impact or I should say, a further negative impact on the bauxite supply or quality. Beyond the first 6 months, we'll have to make some harder decisions, and we're confident that we will get those approvals within the first 6 months of next year. Operator: The next question will come from Katja Jancic with BMO Capital Markets. Katja Jancic: Maybe starting on the contingency value as part of the acquisition. Is it fair to assume that, that is starting to accrue on the alumina side since the alumina price is now above the strike? Or how should we think about that? Molly Beerman: Yes, Katja, if the current -- the third quarter average LME was about $32.20s. I can't remember the exact number, but that would yield about a $13 million payment for the first period. So not substantial. William Oplinger: But Katja was referencing alumina prices. Molly Beerman: The alumina price sorry, there's no -- nothing due on alumina. We've not reached that strike. William Oplinger: At today's levels, Katja, $370 -- I'm sorry, $387 today, we're not at the strike price yet. Katja Jancic: Okay. And then maybe on the asset monetization, I think in the past, you said that there are 2 other assets that could quickly follow Massena East. Can you provide an update on that? William Oplinger: There's 2 other assets that could quickly follow Massena East. Yes. And I'm just joking around, Katja. We just got -- we're pleased to be able to announce the Massena East transaction. And you can see from the way it's structured, it's somewhat of a complex transaction. It gives us some cash upfront, but it will give us cash further over the next 5 years as that data center first gets built and then gets increased in size. So it gives us a lot of upside. There are 2 other ones that we believe that could happen quickly after that. We've not named those publicly. But now that we at least have an agreement and we have to get it closed, at least we have an agreement on Massena East, we're going to focus on those next 2. So more to come. Operator: [Operator Instructions] The next question will come from Bill Peterson with JPMorgan. William Peterson: Maybe actually piggybacking on this Massena East agreement. Will you know the, I guess, the final amount upon the approval of the capacity? Or is this something that as it grows the potential for, I guess, to up to the $250 million additional? I'm just trying to get a sense of when we'll know what kind of value you get. And I guess maybe more importantly, is this going to be kind of a similar template for these future agreements? Or is this maybe viewed as more of a one-off? Molly Beerman: Bill, I'll start with the -- on the size, we do have a -- the permitting initially the minimum will be 180 megawatts. And then we have 2 step-ups potentially, another 300 and then another 200. So the site could be up to 635 megawatts. So depending on how the permitting and approvals go, then we will know the size. But the first payments at closing will be based on the initial permitting and we will be at that minimum level initially. William Oplinger: And as far as your question goes on whether this is a template, I think the answer, Bill, is a resounding no, that there is not a particular template for data center sales. What we are finding is that in order to maximize value out of each site, you have to really negotiate particular parts of the agreement on each site. And so there may be out of one of those 2 that are coming up, similar structures, but we would also be pushing structures that would be more cash upfront and less future value. So there's not a single template for these transactions because each site has its own complexity. William Peterson: Okay. Well understood. Appreciate that. And then I want to kind of understand some of the cost guidance for alumina and aluminum. And I think it's around $30 million for each. So I'm trying to get a sense for how sticky they are. And I guess one in the case of aluminum, try to unpack what higher the raw materials costs are and then similarly with alumina with presumably caustic and how sticky that may be. Molly Beerman: Bill, if you think back, I'll start with caustic. In the second quarter, early after the war began, we saw the caustic price shoot up. That didn't stay though. It moderated pretty quickly. And so as I look at now caustic rolling through the P&L from those high purchase prices, we are not seeing a material sequential impact from that. On the carbon prices, though, we are seeing elevation. When we guided in the third -- sorry, in the second quarter for the third, we thought it would only be about a $15 million impact. It ended up being just over $20 million. So carbon prices rolling through the P&L perspective, just over $20 million in the third quarter, and I have about $10 million more in carbon prices coming up further in the fourth quarter. Now fourth quarter purchase prices are still coming up, but very slightly. So we're not seeing the price escalation. William Peterson: And I just wanted to make sure I'm following back up. I thought your comment was something to the effect that $30 million increase in each segment. That's not the case. It's flat in alumina and a $30 million increase in aluminum. So I just wanted to make sure that, that's clear. Molly Beerman: And of that 30 in Aluminum -- of that 30 in Aluminum, the 10 is the carbon. Operator: The next question will come from Lawson Winder with Bank of America. Lawson Winder: If I could just follow up on the Massena East sale. One thing that wasn't clear is after closing, are there any environmental remediation or demolition or any sort of other legacy liabilities that sit with Alcoa? Or does that just pass on to the buyer? Molly Beerman: No, we will keep the remediation responsibilities. We're continuing to remediate at the site. We are selling the parts of the land that has already completed all of our environmental remediation work. Lawson Winder: Okay. Fantastic. And then just one additional question. again, of course, quite a bit of talk about the AliGroup opportunity and what an opportunity it is. When you look at the potential M&A opportunity set globally, I mean, do you continue to see other unique opportunities like AliGroup? And what sort of appetite does Alcoa have for further acquisitions post the closing of AliGroup? William Oplinger: AliGroup is a big acquisition for us. Let us get this one closed before we start talking about other opportunities. What I really want to prove to the world through this acquisition is that, number one, we can grow this company; and number two, we can successfully integrate an acquisition. We have a pretty large team that's already in place that's working toward the integration so that when we close on day 1, we're going to be ready to integrate this. And I mentioned in my prepared remarks that I was already over in South Africa, met with the President of South Africa, President Ramaphosa, got a very good greeting introduction from him to the country and impressed on him that we're an aluminum company. We want to own Hillside. We want to be in Hillside for the long term, and we're committed to the aluminum industry. So we're going to focus on getting this one done first before we talk about other opportunities. Operator: The next question will come from Richard Garchitorena with Barclays. Richard Garchitorena: First question was basically when you think about the acquisition and you've gotten approvals from South32 shareholders. Looking ahead, is there anything -- what are you doing right now in terms of potentially getting -- preparing for the eventual integration? Can you do some preplanning? Or do you have to wait for any country approvals and contracts on the procurement side? Anything that you can sort of do to help accelerate the capture synergies? William Oplinger: Right. So we're really focused on 2 things currently between now and closing. One is gaining the required regulatory approvals. And there's about a dozen of those, and we have gotten some of those. And at this point, we do not see any red flags associated with getting the regulatory approvals. Secondly, we have taken the last 60 days or so to stand up a significant integration management office, and they are preparing to be able to run those assets from day 1. And you think about the complexity of buying assets of the size, it's not a small undertaking. And so they're focused on being able to sell, make, account for bauxite alumina and aluminum. And so it's not a small undertaking, and we're very focused on it. Molly, I know you're very close to this also. Do you want to make any other comments? Molly Beerman: I'll just add that we do have an 18-month transition service agreement with South32. So we will have coverage past legal day 1, but we are preparing now for all that work ahead so that we can, as soon as we close, start working closely with the teams on integrating the organization, the systems, processes and leveraging all of the synergies that we have identified. William Oplinger: And I should have made it clear, even pre-close, the 2 companies are working together to make sure that it's a successful, in their case, disposition in our case, acquisition. Richard Garchitorena: That's very helpful. And then maybe I can ask a question on the industry in general. You talked about the Middle East looking at ramping up smelting capacity. My question is, is there any constraints to that? Do they have adequate levels of raw materials to run those smelters at full capacity by what they're targeting in the first quarter of next year? The ongoing impacts on shipping through the Hormuz, how does that impact their ability to get to those levels? William Oplinger: I don't have a good answer for that question. You really are going to have to ask them how they plan to be able to do that. I think the one thing if I wax philosophically just for a second, I think the world has changed when it comes to aluminum within the Strait of Hormuz. And I think it's going to be a while before that completely gets normalized of flows in and out. And so I think it is a big impact. You see it in pricing today, even though prices are off from where they were, we're still sitting at close to $3,000 a ton. And so it has had a big impact, and I think it will still have a big impact going forward. Operator: The next question is a follow-up from Timna Tanners of Wells Fargo. Timna Tanners: I just wanted to follow up, if I could, on working capital. There was a big seasonal use in Q1. We really haven't seen much relief. If we see aluminum prices stay at this level, I would imagine you could see a pretty nice release. I just wondered to the extent possible, if you could give us any color about what you might expect at these prices hold into the fourth quarter. Molly Beerman: Tim, if you look at on a days working capital basis and look back in history, we traditionally stepped down from like that 50-day level down into the 35 to 40 level. So I would expect we'll release about 10 days at least going into the fourth quarter. Now obviously, the quantum there will depend on the pricing at the end of the year, but that's our expectation. Operator: The next question is a follow-up from Carlos De Alba with Morgan Stanley. Carlos de Alba: Yes. Just on the approval for the AliGroup transaction, do you require China approval? William Oplinger: No. Carlos de Alba: All right. And then on the Massena East transaction, the step-up in capacity, is that solely based on regulatory approval? Or it's -- or how do you make sure that it is not a decision of the data center, maybe the economics change and they don't want to do the step 1 or step 2 of the increased capacity? William Oplinger: Carlos, in my view, they are very interested in putting the maximum capacity within Massena East. the economics for them work much better as the facility gets larger. So it will be based on how quickly, I guess, a couple of things, how much demand there is, how much regulatory approvals that they get. So those are the 2 real big issues. And I guess how much capital they ultimately have. But my view is they want to see this as large as it possibly can be because I believe their economics get significantly better as it gets larger. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Oplinger for closing remarks. William Oplinger: Thanks, operator, and thank you all for joining our call. Molly and I look forward to sharing further progress when we speak again in January. This concludes the call. Thank you. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect. Before you buy stock in Alcoa, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alcoa wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. 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As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Alcoa (AA) Q3 2026 Earnings Call Transcript was originally published by The Motley Fool

- Alcoa reported third quarter 2026 sales of US$3,704 million and net income of US$483 million, with higher aluminum output and reaffirmed full year production guidance across alumina and aluminum. - The business paired these results with a US$0.10 quarterly dividend and an asset sale plan that targets US$500 million to US$1 billion of monetizations by 2030, signaling an emphasis on cash returns and portfolio pruning alongside operational execution. - We will now look at how Alcoa's third quarter earnings results and reaffirmed guidance interact with its longer term investment narrative. Scan how Alcoa's latest earnings and production trends compare with other materials producers by reviewing a curated set of 33 high quality undervalued stocks that pair cash generation with balance sheet strength. To own Alcoa, you need to be comfortable with a cyclical producer that leans heavily on refinery reliability, smelter uptime and commodity pricing. The short term swing factor today is operational continuity into the fourth quarter, where management is aiming to sustain the stronger refinery performance and higher aluminum output seen in the third quarter. The biggest current risk is that any disruption to bauxite approvals, alumina system stability or maintenance in the Aluminum segment undercuts that production plan while fixed costs stay put. The latest results and reaffirmed 2026 guidance do not radically change that equation; they mostly confirm the existing operating setup. The asset monetization goal of US$500 million to US$1b by 2030, including the potential Massena East sale of up to US$315 million, is the announcement that matters most for the near term story around Alcoa. It links directly to balance sheet flexibility, funding capacity for smelter and refinery work and how much room exists for future shareholder returns. For you as a shareholder, that plan becomes a practical catalyst if disposals close on reasonable terms while core facilities keep running close to current utilization. Execution risk sits in the timing and pricing of those sales, alongside any cost pressure from tariffs, environmental requirements or maintenance that might eat into the cash these transactions are meant to support. Alcoa's narrative projects US$14.3b revenue and US$1.9b earnings by 2029. This implies 1.7% yearly revenue growth and an earnings increase of about US$600m from US$1.3b today. Uncover why Alcoa's fair value indicates a 49% potential upside to its current price, which could narrow more quickly than many investors anticipate. One alternate angle puts carbon and regulatory costs at the center of the Alcoa debate. The most cautious analysts were expecting revenue to trend toward about US$12.2b and earnings near US$1.1b by 2029, which is well below the consensus path. These pre-earnings views could shift, so it helps to compare several narratives side by side. Explore 4 other Alcoa fair value estimates, including one that suggests it could be worth just $48.00. Disagree with existing narratives? Extraordinary investment returns rarely come from following the herd, so go with your instincts. - A great starting point for your Alcoa research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision. - See our latest analysis for Alcoa. The report includes a comprehensive fundamental analysis summarized in a single visual, the Snowflake, making it easy to evaluate Alcoa's overall financial health at a glance. Once you have a view on Alcoa, it can help to cross check that thesis against other opportunities with different risk and income profiles using the Simply Wall St Screener. - For investors who care most about valuation and quality, scan a curated 33 high quality undervalued stocks that blend dependable cash generation with healthier balance sheets. - If resilience comes first for you, focus on a 32 resilient stocks with low risk scores that screens for companies with steadier fundamentals and lower overall risk scores. - When you want to cast a wider net for fresh ideas, consider a 20 high quality undiscovered gems that filters for high quality businesses that fewer investors may be watching closely. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include AA. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

Alcoa Corporation AA used its third-quarter 2026 earnings call to emphasize preparations for the AliGroup acquisition, stronger operational stability and disciplined capital allocation. Management also addressed rising input costs, delayed Australian mining approvals and commodity market conditions. Adjusted earnings of $1.82 per share beat the Zacks Consensus Estimate of $1.65, while revenues of $3.70 billion topped the consensus estimate of $3.61 billion. Alcoa price-consensus-eps-surprise-chart | Alcoa Quote President and CEO William Oplinger said the acquisition of South32's AliGroup assets remains on track to close in the first half of 2027, following shareholder approval and progress on regulatory reviews. Alcoa completed $2.6 billion of debt financing in September toward the approximately $3.1 billion cash consideration. Oplinger said the transaction's locked-box value exceeded $300 million at quarter-end. During an interview with Barclays, Oplinger said an integration management office is preparing for operations from the first day of ownership. CFO Molly Beerman added that an 18-month transition services agreement with South32 will support the handover. Beerman expects higher fourth-quarter production and shipments across both segments, supported by refinery stability and incremental smelter output. Alcoa reaffirmed its annual production and shipment projections. The company expects fourth-quarter Alumina segment performance effects on adjusted EBITDA to remain flat sequentially. Its Aluminum segment faces approximately $30 million of unfavorable effects from raw materials and planned maintenance, alongside another approximately $30 million impact from alumina costs. Responding to JPMorgan, Beerman clarified that carbon costs account for about $10 million of the first $30 million increase. Oplinger also stressed during a Morgan Stanley exchange that the flat alumina performance outlook excludes market pricing changes. Oplinger said alumina markets outside China tightened as the alumina price index rose to approximately $370 per metric ton. Curtailments, project delays and uncertain Indonesian supply additions underpin expectations of further tightening into 2027. China, by contrast, remains well supplied. For aluminum, Oplinger highlighted historically low global inventories of roughly 42 days of consumption and structural regional deficits in North America and Europe. During an interview with Wells Fargo, he estimated approximately 1.5 million metric tons of Indonesian smelting capacity could come online in 2027. Oplinger believes the global market can absorb the additional volume. Alumina production rose 11% sequentially to 2.5 million metric tons as the Pinjarra refinery recovered. Aluminum output increased 2% to 649,000 metric tons and the Alumar smelter restart was completed. Oplinger opened the call by addressing a fatality at the Alumar smelter in September and emphasized stronger safety controls and accountability. Western Australia's mining approval process now extends into 2027. Responding to B. Riley, Oplinger described revised mine sequencing and production schedules designed to protect bauxite supply and quality during the delay. Oplinger outlined an agreement to sell portions of the Massena East site for potential proceeds of up to $315 million, supporting Alcoa's $500 million to $1 billion asset monetization target by 2030. Initial proceeds of $50 million to $65 million are expected at closing, subject to approvals and other conditions. Additional payments depend on permitted data center capacity and commissioning. Answering JPMorgan, Oplinger said future site sales will not follow a single template. Beerman told Bank of America that Alcoa retains remediation responsibilities, although the land being sold has completed environmental remediation. Beerman reported third-quarter free cash flow of $472 million and cash holdings of $4.4 billion, including acquisition financing proceeds. Asked by B. Riley about share repurchases, Oplinger emphasized that deleveraging will take priority after closing. He cited free cash flow, asset sales and potential monetization of Ma'aden shares as debt-reduction resources. Management also expects stronger through-cycle cash generation from the combined portfolio and plans to update its adjusted net debt target at closing. Management's forward agenda centers on completing AliGroup, sustaining production improvements and navigating higher input costs while maintaining operational reliability. Oplinger emphasized pursuing growth that creates long-term shareholder value, while near-term capital allocation remains focused on the acquisition and subsequent debt reduction. AA carries a Zacks Rank #3 (Hold), reflecting a neutral near-term ranking. Its Value, Growth, Momentum and VGM Scores are A, indicating favorable characteristics across these investment approaches. These strong grades indicate strong performance of the stock, although the framework favors stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) with strong Style Scores. AA's Zacks Rank can change as analysts revise earnings estimates following the reported results. You can see the complete list of today's Zacks #1 Rank stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alcoa (AA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). 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Alcoa (NYSE:AA), the global aluminium producer, more than doubled its third-quarter net profit year on year, although lower aluminium prices and shipments weighed on earnings compared with the previous quarter. Net income attributable to Alcoa (NYSE:AA) rose to $483 million in the three months to September, up from $232 million a year earlier, while diluted earnings per share increased to $1.81 from $0.88. Revenue climbed 24% year on year to $3.70 billion but fell 7% from the second quarter as lower aluminium shipments and realised prices offset improvements in the alumina business. Adjusted earnings, which exclude certain exceptional items, reached $485 million, or $1.82 a share, compared with a loss of $6 million a year earlier, while adjusted earnings per share declined from $2.12 in the previous quarter. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), excluding special items, fell to $789 million from $901 million in the second quarter, reflecting the impact of lower aluminium prices and shipments despite improved production costs and higher alumina prices. Cash generation remained strong, with operating cash flow reaching $643 million and free cash flow totalling $472 million, while the company ended September with $4.4 billion in cash, including financing secured for its planned acquisition of South32's assets. Operational performance improved across the business, with alumina production rising 11% sequentially to 2.5 million metric tonnes and aluminium production increasing 2% to 649,000 tonnes. Alcoa (NYSE:AA) also completed the restart of its Alumar smelter in Brazil and recorded year-to-date production records at five smelters and one refinery. The company reaffirmed its 2026 production and shipment forecasts for both its alumina and aluminium divisions, while expecting higher production and shipments in both businesses during the fourth quarter. However, planned maintenance and higher raw material costs are expected to reduce fourth-quarter aluminium segment adjusted EBITDA by about $30 million sequentially, with higher alumina costs expected to create a further $30 million headwind. Alcoa also expects annual interest expense to reach approximately $185 million, above its previous projection following the issuance of debt to help finance the South32 transaction. The acquisition remains on track to close in the first half of 2027 after South32 shareholders approved the deal on October 15, while Alcoa has also agreed to sell portions of its Massena East site in New York in a transaction that could generate up to $315 million as data centre capacity is developed. Shares of Alcoa gained around 9.3% on Friday morning in New York.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. - Achieved six year-to-date production records, signaling improved stability across the global portfolio following previous operational challenges. - Performance recovery at the Pinjarra refinery and the completion of the Alumar smelter restart drove a sequential aluminum production increase of approximately 15 thousand metric tons. - Strategic divergence noted between tightening alumina market fundamentals outside China and a well-supplied domestic Chinese market with increasing refinery capacity. - Management attributes strong third-quarter EBITDA to operational excellence and higher alumina prices, which helped mitigate the impact of lower metal prices. - The Messina East site sale agreement marks the first step in a broader strategy to generate $500 million to $1 billion from asset monetization by 2030. - Safety remains the foundational priority following a tragic fatality in Brazil, with management committing to strengthening risk controls over financial or production targets. - The Alumina Limited Group acquisition is on track for a first-half 2027 close, with integration teams focused on maintaining operational continuity and capturing synergies from day one. - Western Australia mining approvals are now expected to extend into 2027, though management anticipates no material impact on supply or cost due to 6-month contingency planning. - Fourth-quarter guidance assumes continued strong operating performance with higher production and shipments in both segments, despite expected increases in direct input costs. - Post-acquisition capital allocation will prioritize rapid deleveraging, supported by a pro forma leverage target of approximately 1.5x and various cash sources including asset sales. - Management expects further tightening in the alumina market into 2027 due to announced curtailments, project delays, and supply uncertainty in Indonesia. - The Messina East transaction is structured to provide up to $315 million in proceeds, with cash flow tied to the phased development and commissioning of a data center over 7 years. - Completed $2.6 billion in debt financing early to eliminate execution and pricing risks in a volatile bond market ahead of the Alumina Limited Group closing. - Global aluminum inventories remain at historically low levels of approximately 42 days of consumption, increasing market sensitivity to supply disruptions. - Management identified a 'locked box' value of more than $300 million at quarter-end, which will eventually offset the cash consideration for the pending acquisition. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. - Management clarified that 'flat' guidance refers strictly to internal performance elements and excludes market pricing impacts. - Higher realized prices will flow directly to the bottom line if market conditions remain favorable during the quarter. - Management believes the Midwest premium will remain strong even if Canada is carved out, as the marginal ton of aluminum will still likely originate from outside North America. - Alcoa has offered data support to both governments but remains in a speculative position regarding the outcome of ongoing discussions. - Management anticipates approximately 1 million metric tons of smelting capacity will come online in Indonesia next year. - The market is expected to absorb this volume, and current alumina price strength is partially supported by these Indonesian ramp-ups. - The Messina East deal is not a fixed template; management intends to negotiate bespoke agreements for each site to maximize value. - Future transactions may prioritize higher upfront cash payments over the long-term deferred value structure seen in the Messina East agreement.

This article first appeared on GuruFocus. - Revenue: Q3 2026 revenue was $3.7 billion, with sequential change primarily reflecting lower metal prices. - Alumina Segment Third-Party Revenue: Increased 7% to $680 million on higher realized alumina prices and higher shipping volumes. - Aluminum Segment Third-Party Revenue: $3 billion, reflecting lower metal prices and normalized shipments, partially offset by higher value-add product premiums. - Net Income: Q3 2026 net income attributable to Alcoa was $483 million, versus $407 million in the prior quarter. - Earnings Per Share: Increased to $1.81 per common share. - Adjusted Net Income: $485 million, compared with $562 million in Q2 2026. - Adjusted EBITDA: $789 million, as strong operational performance and higher alumina prices partially offset lower metal prices. - Alumina Segment Adjusted EBITDA: Increased $95 million on higher realized alumina prices and improved operational performance at Pinjarra. - Aluminum Segment Adjusted EBITDA: $862 million, with productivity gains more than offset by lower metal prices, lower shipments, and higher carbon costs. - Cash Balance: Ended Q3 2026 at $4.4 billion, including $2.6 billion of bond issue proceeds. - Cash from Operations: $643 million in Q3 2026. - Free Cash Flow: $472 million in Q3 2026; approximately $600 million year-to-date 2026. - Return on Equity: 25.3% through the first nine months of 2026. - Shareholder Returns: $80 million returned year-to-date via regular quarterly dividend. - Alumina Production: Increased aluminum production by approximately 15,000 metric tons sequentially; six year-to-date production records. - Asset Monetization: Massena East Site sale agreement with potential cash proceeds of up to $315 million; first $50 million to $65 million expected at closing. - AliGroup Acquisition: $3.1 billion cash consideration; $2.6 billion debt financing completed; expected closing in first half of 2027; pro forma leverage approximately 1.5 times. - Warning! GuruFocus has detected 8 Warning Signs with AA. - Is AA fairly valued? Test your thesis with our free DCF calculator. Release Date: October 15, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. - Alcoa Corp (NYSE:AA) achieved six year-to-date production records and increased aluminum production by approximately 15,000 metric tons sequentially, demonstrating operational momentum. - The company completed the Alumar smelter restart and delivered a significant performance recovery at the Pinjarra refinery, improving stability and disciplined execution. - Alcoa Corp (NYSE:AA) reached a definitive agreement for the sale of a portion of the Massena East Site with potential cash proceeds of up to $315 million, supporting its asset monetization target. - The AliGroup acquisition advanced with South32 shareholders approving the transaction, and Alcoa Corp (NYSE:AA) completed a $2.6 billion debt financing, reducing execution risk. - Alcoa Corp (NYSE:AA) generated strong free cash flow of $472 million in Q3 2026 and $600 million year-to-date, with a robust cash balance of $4.4 billion. - A tragic fatality occurred at the Alumar smelter in Brazil, highlighting ongoing safety challenges despite previous improvements. - Lower metal prices negatively impacted revenue and adjusted EBITDA in the third quarter, with aluminum segment adjusted EBITDA declining due to lower shipments and higher carbon costs. - Mining approvals in Western Australia are taking longer than expected, now anticipated to extend into 2027, which could affect bauxite supply and quality if further delays occur. - Alcoa Corp (NYSE:AA) expects higher direct input costs in Q4, including elevated carbon costs and planned maintenance, which may pressure margins. - The company faces market uncertainties, including potential tariff changes on Canadian aluminum and aggressive Indonesian supply ramp-up, which could impact pricing and demand. Q: On the guidance for flat alumina performance, is there any cost pressure offsetting improved top-line pricing? A: CFO Molly Beerman explained that the "flat" guidance refers only to performance elements, not market pricing. Maintenance moving between regions is fully covered by improved shipment performance, resulting in a net-zero impact. CEO William Oplinger clarified that the guidance does not include pricing, so if prices improve during the quarter, it will flow through to results. Q: Regarding the Massena East sale, will Alcoa retain any environmental remediation or legacy liabilities after closing? A: CFO Molly Beerman stated that Alcoa will keep the remediation responsibilities and is continuing to remediate at the site. The company is selling only the portion of land where all environmental remediation work has already been completed. Q: What are the details and potential size of the Massena East data center transaction, and will it serve as a template for future deals? A: CFO Molly Beerman explained the site could scale up to 635 megawatts through permitting step-ups (initial 180 MW, then 300 MW, then 200 MW), with the first payment at closing based on the minimum level. CEO William Oplinger stated there is no single template for data center sales, as each site requires unique negotiations to maximize value, though some future deals may have similar structures. Q: Can you provide an update on the two other assets that could quickly follow Massena East in the asset monetization strategy? A: CEO William Oplinger confirmed there are two other assets that could follow quickly but declined to name them publicly. He noted the Massena East transaction is complex, providing upfront cash and future payments over five years as the data center is built and expanded, with significant upside potential. Q: What is the status of the Western Australia EPA mining approvals, and what contingency plans are in place if they are delayed further? A: CEO William Oplinger stated the approvals are now expected to extend into 2027, about six months later than anticipated. Contingencies include re-sequencing and modifying mining activities and continuing to dig in existing mines. He expressed confidence that approvals will be secured within the first six months of 2027 without further material impact on bauxite supply, quality, or cost. Q: What is the outlook for aluminum supply from Indonesia and China's production cap? A: CEO William Oplinger expects approximately 1.5 million metric tons of smelting capacity to come online in Indonesia next year, which he believes the 75-million-ton market can absorb. On China, he noted the production cap appears to be more of a policy tool than a firm limit, with production around 45.8 million metric tons in 2026, about 400,000 tons over the nominal cap, suggesting capacity is held while some production creep is allowed. Q: What is the priority for capital allocation, particularly regarding share repurchases, given pressure on aluminum equities? A: CEO William Oplinger stated the priority is closing the South32 AliGroup transaction in the first half of 2027, followed by rapid de-levering. The company raised $2.6 billion in debt for the $3.1 billion cash consideration, using some balance sheet cash. He noted the approximately $300 million in the locked box will go toward the cash consideration, but the current target is de-levering rather than share repurchases. Q: What are the cost guidance details for alumina and aluminum, particularly regarding caustic and carbon costs? A: CFO Molly Beerman clarified that alumina costs are flat sequentially, while aluminum costs are expected to increase by $30 million, with $10 million from carbon. Caustic prices spiked early after the war but moderated quickly, with no material sequential impact. Carbon prices had a just over $20 million impact in Q3 and about $10 million more is expected in Q4, though purchase price escalation is slowing. Q: What is the status of the AliGroup acquisition integration planning and regulatory approvals? A: CEO William Oplinger stated the company is focused on gaining about a dozen required regulatory approvals, with no red flags seen so far. A significant integration management office has been stood up over the last 60 days to prepare for running the assets from day one. CFO Molly Beerman added that an 18-month transition service agreement with South32 provides coverage past legal day one. Q: What is the outlook for working capital release in the fourth quarter? A: CFO Molly Beerman stated that on a day's working capital basis, the company traditionally steps down from around 50 days to 35-40 days. She expects to release about 10 days at least going into the fourth quarter, with the quantum depending on pricing at year-end. Q: Does the AliGroup transaction require approval from China? A: CEO William Oplinger confirmed that China approval is not required for the AliGroup transaction. Q: What is the potential for further M&A opportunities beyond AliGroup? A: CEO William Oplinger stated the company is focused on closing the AliGroup acquisition first before considering other opportunities. He emphasized the goal is to prove Alcoa can grow and successfully integrate an acquisition, with a large integration team already in place and engagement with South African stakeholders, including President Ramaphosa. Q: What is the outlook for the alumina market and pricing? A: CEO William Oplinger noted the alumina market tightened outside China with the API increasing to approximately $370 per metric ton. He expects further tightening in Q4 and into 2027, driven by announced curtailments, project delays, and uncertainty in Indonesia around new supply additions, while recovering Middle East production and Indonesian smelter ramp-ups support additional demand. Q: What is the status of the potential US tariff carve-out for Canadian aluminum? A: CEO William Oplinger stated Alcoa does not know what discussions are ongoing between the US and Canada but has offered support to both governments. He believes that even with a carve-out or lower tariff, the marginal ton would still come from outside North America, keeping the Midwest premium strong, though he noted this is currently speculation. Q: What is For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Alcoa (AA) reported $3.7 billion in revenue for the quarter ended September 2026, representing a year-over-year increase of 23.7%. EPS of $1.82 for the same period compares to -$0.02 a year ago. The reported revenue compares to the Zacks Consensus Estimate of $3.61 billion, representing a surprise of +2.49%. The company delivered an EPS surprise of +10.3%, with the consensus EPS estimate being $1.65. While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall Street expectations to determine their next course of action, some key metrics always provide a better insight into a company's underlying performance. Since these metrics play a crucial role in driving the top- and bottom-line numbers, comparing them with the year-ago numbers and what analysts estimated about them helps investors better project a stock's price performance. Here is how Alcoa performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts: - Bauxite production in Tons: 9.30 Mmt versus the two-analyst average estimate of 9.15 Mmt. - Alumina production in Tons: 2,467.00 Kmt versus 2,443.54 Kmt estimated by two analysts on average. - Aluminum production in Tons: 649.00 Kmt versus the two-analyst average estimate of 629.01 Kmt. - Third-party bauxite shipments in Tons: 1,500.00 Mmt versus 1,641.96 Mmt estimated by two analysts on average. - Intersegment Alumina Shipments: 1,314.00 Kmt versus 1,180.88 Kmt estimated by two analysts on average. - Total aluminum shipments in Tons: 693 thousand compared to the 687.56 thousand average estimate based on two analysts. - Total Third-party sales- Alumina (including Bauxite): $680 million versus $695.18 million estimated by two analysts on average. - Third-party sales- Bauxite: $85 million versus the two-analyst average estimate of $95.8 million. The reported number represents a year-over-year change of -24.8%. - Intersegment sales- Aluminum: $5 million compared to the $4.5 million average estimate based on two analysts. The reported number represents a change of 0% year over year. - Third-party sales- Aluminum: $3.02 billion versus the two-analyst average estimate of $3.16 billion. The reported number represents a year-over-year change of +48.1%. - Intersegment sales- Alumina: $542 million versus the two-analyst average estimate of $443.88 million. The reported number represents a year-over-year change of +14.4%. - Third-party sales- Alumina: $595 million versus $599.38 million estimated by two analysts on average. Compared to the year-ago quarter, this number represents a -29.3% change. View all Key Company Metrics for Alcoa here>>> Shares of Alcoa have returned -13.4% over the past month versus the Zacks S&P 500 composite's +1.4% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Alcoa (AA) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

- Interested in Alcoa? Here are five stocks we like better. - Alcoa's operations improved in Q3: Net income rose to $483 million, while higher alumina prices, productivity gains and the completed Alumar restart offset lower aluminum prices. The company also reported $789 million in adjusted EBITDA and $472 million in free cash flow. - The planned AliGroup acquisition advanced toward a first-half 2027 closing: Alcoa completed $2.6 billion in debt financing for the $3.1 billion cash transaction and expects post-deal leverage of roughly 1.5 times, with debt reduction prioritized over share repurchases. - Alcoa expects tighter alumina and aluminum markets: Alumina supply outside China is tightening, global aluminum inventories remain historically low and demand is strongest in packaging and electrical markets. The company also agreed to sell part of its Massena East site for up to $315 million as part of a broader asset-monetization plan. - O'Reilly Automotive's Stock Slump Hides a Stronger Business Alcoa (NYSE:AA) reported third-quarter 2026 net income attributable to the company of $483 million, or $1.81 per share, compared with $407 million in the prior quarter, as improved operating performance and higher alumina prices helped offset lower metal prices. Adjusted net income attributable to Alcoa was $485 million, compared with $562 million in the second quarter. Adjusted EBITDA totaled $789 million. Third-quarter revenue was $3.7 billion, with the sequential change primarily reflecting lower aluminum prices, according to Chief Financial Officer Molly Beerman. → Don't Get NVIDIA's Reflection AI Interest Wrong: Its Moat Could Deepen - Alcoa's Gallium Project Opens a New Door Beyond Aluminum President and Chief Executive Officer William Oplinger opened the call by addressing a fatality at the company's Alumar smelter in Brazil on Sept. 16. He said the death of an employee had affected the company and that Alcoa would seek to learn from the event, strengthen its safety culture and reinforce accountability. Oplinger said Alcoa recorded six year-to-date production records during the quarter, raised aluminum production by approximately 15,000 metric tons sequentially, completed the restart of the Alumar smelter and achieved a "significant performance recovery" at its Pinjarra refinery. → Tesla Wants to Make Its Own Chips—What Could Go Wrong? - Advance Auto Parts Plunged, But Its Turnaround Is Still Working In the alumina segment, third-party revenue increased 7% sequentially to $680 million, driven by higher realized alumina prices and higher shipping volumes. Segment adjusted EBITDA rose by $95 million as higher prices and improved performance at Pinjarra supported results. Aluminum third-party revenue was $3 billion. Beerman said lower metal prices and normalized shipment levels following second-quarter inventory repositioning were partly offset by higher value-add product premiums. The aluminum segment generated adjusted EBITDA of $862 million, with productivity gains, higher molten production and cost discipline more than offset by lower prices, reduced shipments and higher carbon costs. → Birkenstock's Strong Growth Creates a Buying Opportunity Alcoa ended the quarter with $4.4 billion in cash, including $2.6 billion in proceeds from a September bond issue. Cash from operations was $643 million, while free cash flow totaled $472 million in the quarter and approximately $600 million through the first nine months of 2026. Return on equity for the first nine months was 25.3%. Beerman said Alcoa returned $80 million to shareholders through its regular quarterly dividend year to date. During the question-and-answer session, Oplinger said the company's capital-allocation priority following its planned acquisition of AliGroup would be debt reduction rather than share repurchases. Alcoa said it completed $2.6 billion in debt financing for its planned AliGroup acquisition and canceled the related bridge facility. The financing, together with cash on hand, is intended to fund the $3.1 billion cash consideration for the transaction at closing. South32 shareholders have approved the transaction, and Alcoa continues to expect the deal to close in the first half of 2027, subject to regulatory approvals. Oplinger said the company estimates the transaction's locked-box value exceeded $300 million at the end of the third quarter based on publicly available information and South32 production guidance. The company has established transition and integration teams and is preparing to operate the acquired assets following closing. Beerman said Alcoa has an 18-month transition services agreement with South32 that will provide support beyond the legal closing date. Oplinger said Alcoa expects pro forma leverage of roughly 1.5 times following the acquisition. The company plans to use free cash flow, locked-box cash, transformation asset-sale proceeds and potential monetization of its Ma'aden shares to reduce debt over time. Alcoa also announced a definitive agreement to sell a portion of its Massena East site, with potential cash proceeds of up to $315 million. The company expects to receive $50 million to $65 million at closing, anticipated within six months pending customary conditions, with remaining consideration expected before the end of the decade. The agreement allows up to seven years for commissioning. The transaction is the first announced step toward Alcoa's goal of generating $500 million to $1 billion through asset monetization by 2030. Beerman said the initial development would involve at least 180 megawatts of capacity, with potential later expansions that could bring the site to as much as 635 megawatts. Alcoa will retain remediation responsibilities at the broader Massena East site, though Beerman said the portion being sold has completed environmental remediation work. Oplinger said deal structures for future property sales could differ because each site has its own complexities. Oplinger said alumina markets outside China tightened during the quarter, with the API reaching approximately $370 per metric ton. He expects further tightening in the fourth quarter and into 2027 due to announced curtailments, project delays and uncertainty around Indonesian supply additions. China, meanwhile, remains relatively well supplied as new refinery capacity has increased production and inventories. Alcoa expects higher production and shipments in both its alumina and aluminum segments in the fourth quarter, assuming refining-system stability continues and smelter productivity gains persist. The company expects some higher direct input costs and planned maintenance expenses. Beerman clarified that the company's performance outlook excludes commodity-price movements; higher market prices would flow through to results. On aluminum, Oplinger said global inventories remain historically low at about 42 days of consumption. He said Alcoa's order book remains solid, with most products sold out or tightly committed. Packaging and electrical markets are leading demand, transportation remains resilient, and construction—particularly in Europe—continues to be the weakest end market. Alcoa said Western Australia Environmental Protection Authority review of its mine plan is taking longer than expected and is now expected to extend into 2027. The company has incorporated an additional six months of mining in current areas into its plans and said approvals by mid-2027 are not expected to materially further affect bauxite supply, quality or cost. Alcoa Corporation (NYSE:AA) is a global producer of aluminum and an integrated participant in the aluminum industry. Its operations span the value chain from bauxite mining and alumina refining to aluminum smelting, casting and recycling. The company supplies aluminum products used in transportation, building and construction, packaging, aerospace, automotive, electrical and other industrial applications. Its portfolio includes primary aluminum, alumina, aluminum billets and other cast products, as well as low-carbon and recycled aluminum offerings. Alcoa traces its origins to the Pittsburgh Reduction Company, founded in 1888, and has helped develop the modern aluminum industry. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "What Alcoa (AA) Said on Its Q3 Earnings Call" was originally published by MarketBeat. View MarketBeat's top stocks for October 2026.