Alcoa’s Q3 2016 Earnings Review: Productivity Improvement Initiatives Drive Improvement In Results
Alcoa’s continuing productivity improvement initiatives boosted the company’s Q3 earnings results, though the reported EPS was slightly below market expectations. Given the weakness in alumina and aluminum prices over the past few years, Alcoa has identified productivity improvement as a major area of focus for the company. Apart from improving operational efficiency, the company has also been shutting down high-cost production capacity, particularly pertaining to the company’s upstream businesses. The savings from the company’s productivity improvement initiatives offset the impact of lower alumina prices, unfavorable currency movements, and higher labor and maintenance related costs on the company’s results. In addition, customer adjustments to delivery schedules in the aerospace end markets weighed on the results of the value-added business segments. [1] Going forward, the company’s planned split of its upstream and value-added operations will be implemented from November 1. The planned split will separate the company’s value-added segments, with robust long-term demand, from the aerospace and automotive end markets, from its commodity businesses, which have been characterized by subdued pricing for the past few years.
Have more questions about Alcoa? See the links below.
- What Is Alcoa’s Revenue & EBITDA Breakdown?
- What Is Alcoa’s Fundamental Value Based On Expected 2015 Results?
- By What Percentage Did Alcoa’s Revenue & EBITDA Increase In The Last 5 Years?
- How Has Alcoa’s Revenue Composition Changed Over The Last 5 Years?
- By What Percentage Can Alcoa’s Revenue & EBITDA Grow In The Next 3 Years?
- What Is The Impact Of Alcoa’s Enhanced Aerospace Focus On Revenue Growth From Aerospace End Markets?
- With Alcoa Heading For A Split In 2016, What Will The Two Companies Look Like?
- Which Are The Major Growth Areas For Alcoa Over The Next Three Years?
- Alcoa’s Q1 2016 Earnings Preview: Weakness In Aluminum Prices To Negatively Impact Revenue & Earnings
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Notes:
- Alcoa’s Q3 2016 Earnings Call Transcript, Seeking Alpha [↩]