Alcoa Q3 Results Beat Street View, To Buyback $500 Mln Shares; Stock Up 5%

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Shares of Alcoa Corp. (AA) are gaining over 5% in extended session on Thursday after the aluminum producer reported a third-quarter profit and revenues that trounced Wall Street's estimates, reflecting an increase in aluminum and alumina prices. The company also announced an initiation of quarterly dividend and stock buyback of $500 million.

Pittsburgh-based Alcoa reported third-quarter profit of $337 million or $1.76 per share, compared to last year's loss of $49 million or $0.26 per share last year.

Excluding one-time items, earnings for the quarter were $391 million or $2.05 per share, compared to last year's loss of $218 million or $1.17 per share. On average, 9 analysts polled by Thomson Reuters expected earnings of $1.80 per share.

Revenues for the quarter rose to $3.11 billion from $2.37 billion a year ago. Analysts had a consensus revenue estimate of $2.93 billion. Revenue growth were driven by higher aluminum and alumina prices as well as increase premiums for value-added product sales.

"The strategic work we've been implementing across our Company has helped us effectively capture the benefits from very strong market fundamentals and deliver another excellent quarter with record profitability," said Alcoa President and CEO Roy Harvey.

Alumina shipments dropped to 2.43 million metric tons from 2.55 million metric tons last year. Aluminum shipments slipped to 722 thousand metric tons from 767 thousand metric tons last year. Bauxite shipments dropped to 1.5 million dry metric tons from 1.6 million last year.

Average price per metric ton of alumina increased to $312 from $274 last year, while aluminum's average price rose to $3,124 per metric ton from $1,904 per metric ton last year.

Looking forward to 2021, Alcoa continues to expect a strong 2021 based on the continued economic recovery and increased demand for aluminum in all end markets.

The company's 2021 shipment outlook for the Alumina and Aluminum segments remains unchanged with Alumina projected at 14.1 to 14.2 million metric tons and Aluminum expected to be 2.9 to 3.0 million metric tons.

Alcoa also announced the initiation of a quarterly cash dividend on its common stock and a new $500 million share repurchase program. The first quarterly cash dividend of $0.10 per share will be paid on November 19 to stockholders of record as of October 29.

AA closed Thursday's trading at $48.60, up $0.20 or 0.41%, on the NYSE. The stock further gained $2.54 or 5.23% in the after-hours trading.

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