Alcoa Corporation (NYSE:AA) announced better-than-expected second-quarter results but cut its adjusted EBITDA forecast due to tariffs on imported aluminum.
The aluminum producer reported earnings of US$1.61 per share on revenue of US$3.5bn compared with US$0.62 per share on revenue of US$2.86bn in the previous year’s second quarter.
The Pittsburgh-based company crushed Wall Street estimates of US$1.34 EPS on revenue of $3.44bn.
The producer credits higher aluminum prices and a stronger US dollar for the revenue increase.
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“Market pricing continued to be favorable in the second quarter and drove a 38 percent sequential increase in adjusted EBITDA excluding special items,” said CEO Roy Harvey in a press release.
For the year ahead, the company expects adjusted EBITDA excluding special items to be in the range of US$3bn to US$3.2bn, down from its previous quarter’s range of US$3.5bn to US$3.7bn.
Alcoa racked up US$15mln in tariff costs, primarily from Canada where the US tariffs went into effect on June 1.
The company expects a full-year global deficit for aluminum ranging between 1.1 million to 1.5 million metric tons compared with last quarter’s estimate of between 600,000 to 1 million metric tons.
“Uncertainty continues to exist in the global supply chain due to U.S. tariffs and ongoing alumina supply disruptions in the Atlantic region,” stated the company in a press release.
Shares of Alcoa were down more than 2% to US$46.91 in Wednesday after-hours trading.