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How Much Money Does Arconic Expect to Make in 2017?


Aug. 18 2020, Updated 6:34 a.m. ET


In the previous article, we looked at the key takeaways from Arconic’s 2Q17 earnings. Arconic (ARNC) also updated its 2017 guidance during the 2Q17 earnings call. Alcoa (AA) also revised its 2017 guidance during the company’s 2Q17 earnings call. You can read Alcoa’s Views on the Aluminum Industry and Its Outlook to check Alcoa’s guidance. In this article, we’ll see how Arconic expects to fare on different financial metrics in 2017.

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Arconic expects to post revenues between $12.3 billion and $12.7 billion this year. Previously, the company had said that it expects its 2017 revenues to be between $11.8 billion and $12.4 billion. Higher aluminum prices are the key driver of the higher guidance. While Arconic doesn’t produce primary aluminum (CENX), it passes higher aluminum prices to its customers (BA) (F).

Arconic also narrowed its adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) guidance to $1.81 billion to $1.86 billion from the previous guidance of $1.77 billion to $1.86 billion. Also, the company now expects to deliver adjusted EPS (earnings per share) between $1.15 and $1.20 as compared to the previous guidance of $1.10 and $1.20.

Cash flows

Although Arconic hasn’t revised its 2017 guidance for free cash flows of more than $350 million, the management’s tone reflected the company’s confidence in posting free cash flows in excess of that figure. According to Arconic, higher EBITDA and lower-than-expected capital expenditure could help it deliver free cash flows in excess of $350 million this year.

We should remember that Arconic had supplied some parts for the Grenfell Tower in London. In the next article, we’ll see what Arconic management had to say on this issue during its 2Q17 earnings call.


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