Arconic’s 1Q17 earnings
Arconic (ARNC) released its 1Q17 earnings on April 25. The company was listed as a separate entity on November 1, 2016, when Alcoa split into two new entities, Alcoa (AA) and Arconic. In this article, we’ll look at the key takeaways from Arconic’s 1Q17 earnings.
- Arconic reported revenues of $3.2 billion in 1Q17, a 4.5% year-over-year (or YoY) growth. The company’s 1Q17 adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) rose 11% YoY to $485 million. The consolidated EBITDA is the summation of Arconic’s reporting segments adjusted for corporate expenses.
- Arconic also managed to improve its profit margin, posting an adjusted EBITDA margin of 15.2% in 1Q17 as compared to 14.3% in the corresponding quarter last year.
- Arconic has three reporting segments: GRP (Global Rolled Products), TCS (Transportation and Construction Solutions), and EP&S (Engineered Products and Solutions).
- The EP&S segment, which caters to the aerospace sector (BA) (CSTM) (ITA), posted adjusted EBITDA of $306 million in 1Q17, almost flat as compared to 1Q16. However, the segment’s adjusted EBITDA margin fell 0.4% as compared to 1Q16. According to Arconic, “Adjusted EBITDA was driven by volume and net cost savings excluding engine ramp-up costs, which offset unfavorable mix, price and ramp-up costs.”
- The GRP segment generated adjusted EBITDA of $171 million in 1Q17. The segment generated adjusted EBITDA of $155 million in the corresponding quarter last year.
- The TCS segment generated adjusted EBITDA of $72 million in 1Q17 as compared to $64 million in the corresponding quarter last year.
Arconic’s 1Q17 earnings were better than expected. Alcoa, which released its 1Q17 earnings on April 24, also managed to impress markets with its earnings and outlook. You can read Alcoa Posts Earnings Beat and Positive Outlook in 1Q17 for more information.
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