Arconic Inc

China exported 350,000 metric tons of unwrought aluminum in October. Chinese aluminum exports fell ~1.8% YoY in the first ten months of 2016.

Aluminum industry outlook For commodity companies like Rio Tinto (RIO), industry outlook is as important—if not more important—than the company’s position in the industry. Let’s see what senior aluminum executives have had to say about the aluminum industry’s outlook during their companies’ 3Q16 earnings calls. Century Aluminum Century Aluminum (CENX) expects two million metric tons […]

While Alcoa (AA) has seen upward price action following its split, Arconic (ARNC) has sagged. However, Arconic’s investors can still find some solace in Alcoa’s gains.

When the split was announced last year, Arconic was supposed to be the crown jewel that would help drive value for shareholders once listed as a separate entity.

Arconic is scheduled to release its 1Q17 earnings on April 25. ARNC was listed as a separate entity on November 1, 2016, when Alcoa split into two entities.

The expected synergy from Alcoa’s acquisition of Firth Rixson could be a key driver of Arconic’s (ARNC) medium-term performance.

In 2Q17, Arconic generated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $444 million, up 3% as compared to the corresponding period last year.

Higher Chinese aluminum production could spoil the party that companies such as Alcoa and Century Aluminum (CENX) are currently enjoying.

Buffett admitted that acquisitions aren’t cheap. He lamented that the company might have to deploy its cash into publicly-traded companies (SPY).

Alcoa (AA) made a closing high of $38.54 on February 14, 2017. Alcoa made its fresh 52-week high in October as aluminum moved to higher price levels.

Alcoa (AA) released its 3Q17 earnings on October 18 and reported revenues of $2.96 billion in the quarter. Alcoa posted revenues of $2.85 billion in 2Q17.

Alcoa (AA) and Arconic (ARNC) are now independent corporate entities. Furthermore, the two companies operate in different businesses.

Elliott Funds has proposed unifying BHP Billiton’s (BHP) (BBL) dual-listing structure into a single Australian-headquartered and Australian tax resident–listed company.

Alcoa closed at $34.40 on March 31, 2017, rising 2.7% from the previous day’s close. Though Alcoa is trading at a year-to-date rise of 23.7%, it’s lost some of its gains over the last month.

Due to Alcoa’s (AA) strong cash flow generation in November and December 2016, its net debt fell below $600 million on December 31, 2016.

On February 23, 2017, the S&P 500 Utilities Sector surged and closed at its highest level since September 27, 2016.

According to Dow Jones, Elliott Management’s regulatory filings reveal that the company finds Arconic (ARNC) “dramatically undervalued.”

Alcoa (AA) expects to generate adjusted EBITDA between $2.1 billion–$2.3 billion in fiscal 2017.

After the split, Arconic (ARNC) held an ~20% stake in Alcoa (AA), which Arconic plans to monetize in 18 months. However, ARNC retained the option to hold Alcoa’s stake for up to five years.

Thanks to Alcoa’s (AA) strong cash flow generation in November and December 2016, its net debt has fallen below $600 million.

Currently, Alcoa (AA) has a BB- credit rating from Standard & Poor’s with a stable outlook.

In its 2017 EBITDA guidance, Alcoa (AA) assumed aluminum prices of $1,795 per metric ton and an alumina price index of $355 per metric ton.

Alcoa (AA) expects its alumina shipments to range from 13.8 million–13.9 million metric tons in fiscal 2017 compared to 13.2 million metric tons in fiscal 2016.

Alcoa (AA) released its 4Q16 financial results on January 24, 2017. AA reported a net loss of $125 million in 4Q16, which translates into a loss of $0.68 per share.

Analysts expect Arconic to post revenues of $3.0 billion in 4Q16. Alcoa’s downstream business posted revenues of $3.37 billion in 3Q16.

Arconic will release its 4Q16 earnings on January 31. Its 4Q16 earnings could be an opportunity for Arconic to get some support from Wall Street.

Alcoa expects global aluminum markets to be in a surplus in 2017. It expects to generate an adjusted EBITDA between $2.1 billion and $2.3 billion.

Alcoa reported revenues of $2.54 billion in 4Q16. It’s the first quarter that Alcoa reported its upstream results on a standalone basis after the split.

After Alcoa’ (AA) split, Arconic’s (ARNC) investors might not be too interested in commodity prices. For Alcoa, commodity prices should become a key performance driver.

Alcoa made a 52-week low on January 20, 2016, and joined the ranks of other mining companies to hit fresh 52-week lows such as BHP Billiton, Rio Tinto, and Vale.

On November 1, 2016, Alcoa (AA) split into two entities: Alcoa and Arconic (ARNC). Let’s take a look at the timeline of Alcoa’s split.

One of the biggest investor concerns about Alcoa’s (AA) split related to the splitting of liabilities—namely, debt and pension liabilities.

Alcoa’s growth drivers changed after the split. Improved commodity market sentiments are also helping Alcoa and other primary producers.

As the shock over Donald Trump winning the US presidential election slowly subsides, the market’s attention has shifted to some other upcoming events.

In terms of earnings, 3Q16 was a dismal quarter for US-based aluminum producers. Alcoa’s 3Q16 EPS missed consensus estimates by roughly $0.01.

Companies such as Rio Tinto (RIO), Norsk Hydro (NHYDY), and Alcoa (AA) have alumina refining and aluminum smelting operations.

The Engineered Products and Solutions business of consolidated Alcoa would be the key driver of Arconic’s earnings, given its share in the company’s earnings.

When Alcoa’s split was announced in September 2015, aluminum prices were trading near their six-year lows.