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Arconic's (ARNC) Earnings & Revenues Top Estimates in Q2

Zacks Equity Research

Arconic Inc. ARNC swung to a loss (as reported) of $121 million or 27 cents per share in second-quarter 2019, from a profit of $120 million or 24 cents in the prior-year quarter. The bottom line was hurt by non-cash asset impairment charges of $357 million.

Barring one-time items, adjusted earnings per share were 58 cents, up from 37 cents a year ago. The figure topped the Zacks Consensus Estimate of 50 cents.

Arconic generated revenues of $3,691 million, up around 3% year over year. It beat the Zacks Consensus Estimate of $3,641.7 million.

Organic revenues rose 10% year over year on the back of strong volumes across all segments and major markets and favorable pricing.


Arconic Inc. Price, Consensus and EPS Surprise


Arconic Inc. Price, Consensus and EPS Surprise

Arconic Inc. price-consensus-eps-surprise-chart | Arconic Inc. Quote

Segment Highlights

Engineered Products and Solutions (EP&S): Revenues in the division were $1.6 billion, up 6% year over year. Organic revenues in the segment rose 8%, supported by growth in aerospace engines and defense.

Global Rolled Products (GRP): Revenues in the division came in at $1.6 billion in the quarter, essentially flat year over year. Organic revenues in the segment went up 11%.

Transportation and Construction Solutions (TCS): Revenues in the segment were $548 million, down 2% year over year. Organic revenues rose 3%.

Financial Position

Arconic had cash and cash equivalents of $1,357 million at the end of the quarter, down around 7% year over year. Long-term debt fell roughly 7% year over year to $5,901 million.

Cash provided from operations was $106 million in the reported quarter.


Arconic continues to expect revenues in the range of $14.3-$14.6 billion for 2019. The company has raised its adjusted earnings guidance to the range of $1.95-$2.05 per share from the prior view of $1.75-$1.90 per share. Moreover, it now expects adjusted free cash flow to be in the band of $700-$800 million, up from $650-$750 million expected earlier.

The company expects adjusted earnings for the third quarter to be in the range of 47-53 cents.

Price Performance

Arconic's shares have gained 14.8% in the past year against the industry’s 21% decline.



Zacks Rank & Key Picks

Arconic currently sports a Zacks Rank #1 (Strong Buy).

Other top-ranked stocks worth considering in the basic materials space include SSR Mining Inc. SSRM, Kinross Gold Corporation KGC and Flexible Solutions International Inc FSI.

SSR Mining has an estimated earnings growth rate of 134.8% for the current year and carries a Zacks Rank #1. Its shares have rallied 58% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.

Kinross has projected earnings growth rate of 100% for the current year and carries a Zacks Rank #1. The company’s shares have gained 30.3% in a year’s time.

Flexible Solutions has an expected earnings growth rate of 342.9% for the current fiscal year and carries Zacks Rank #2 (Buy). Its shares have surged around 111% in the past year.

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