Alcoa Corporation (AA) beat earnings, as well as announced a share repurchase program and the initiation of a quarterly dividend. Alcoa is up 6.69% in pre-market trading Friday.
Aluminum
Alcoa Corporation reported record quarterly net income in the third quarter with a 10% sequential increase in revenue. This was helped by high aluminum and alumina prices, as well as higher premiums for value-add products. Aluminum is among the many metals facing shortages right now and has climbed to record heights during the pandemic to its current trading price of $3,117.00 per ton.
Production
Alumina segment production was down 4% in the third quarter after a damaged ship at the company’s Alumar refinery caused lower production in Western Australia and Brazil. The damage, which happened in July, reduced production at the Alumar refinery by one-third. The company had about 95% production capacity restored by early October through the use of temporary cranes and a permanent fix is being planned. Further, shipment for value-added aluminum products decreased 5% sequentially due to seasonally lower European sales.
Dividend, Share Repurchases
Alcoa also announced the initiation of a quarterly dividend and a new share repurchase program that will run alongside its current program. The company will pay its first quarterly dividend of $0.10 per share on November 19, 2021, to stockholders of record as of October 29, 2021.
Additionally, the company is now authorized to purchase up to $650 million shares of its common stock after announcing a new share repurchase program worth up to $500 million.
The Future
Alcoa said it expects global demand to be about 10% higher in 2021 than 2020, passing 2019's pre-pandemic levels.
