How Fast Is Alcoa’s Aerospace Revenue Growing?

+5.19%
Upside
31.03
Market
32.64
Trefis
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Alcoa

Alcoa announced the signing of a long-term supply contract with Embraer worth $470 million last week. [1] The signing of this contract follows on the heels of a flurry of activity pertaining to the aerospace segment over the course of 2015, resulting in the signing of long-term supply contracts worth roughly $10 billion. [2] As a result, the company’s revenue from the aerospace end market (consisting of the sale of a variety of multi-material value-added products) has grown at a CAGR of around 14% over the two-year period ending 2016, despite an 8% annual decline in the company’s overall revenue due to a fall in the prices of aluminum and alumina and the idling or permanent closure of high-cost upstream production capacity. The rate of growth of aerospace revenue is likely to slow down going forward, post the commencement of supply pertaining to recently struck deals.

How Fast Is Alcoa's Aerospace Revenue Growing

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Notes:

1) The purpose of these analyses is to help readers focus on a few important things. We hope such lean communication sparks thinking, and encourages readers to comment and ask questions on the comment section, or email content@trefis.com
2) Figures mentioned are approximate values to help our readers remember the key concepts more intuitively. For precise figures, please refer to our complete analysis for Alcoa

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Notes:
  1. Alcoa Awarded Multi-year, $470 Million Contract with Embraer, Alcoa News Release []
  2. Alcoa Wins Fourth Boeing Contract in String of Recent Deals, Alcoa News Release []