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

Arconic Inc. (NYSE: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.

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.

Outlook

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. (NASDAQ:SSRM) , Kinross Gold Corporation (NYSE:KGC) and Flexible Solutions International Inc (NYSE: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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