Arconic's (ARNC) Earnings And Sales Beat Estimates In Q4

Arconic Inc. (NYSE:ARNC) reported net loss of $727 million or $1.51 per share for the fourth quarter of 2017, compared with net loss of $1,258 million or $2.91 per share a year ago.

Barring one-time items, adjusted earnings came in at 31 cents per share for the reported quarter, which beat the Zacks Consensus Estimate of 24 cents.

Arconic reported revenues of $3,271 million, up around 10.2% year over year. Sales also topped the Zacks Consensus Estimate of $3,070.5 million. Revenues were driven by improved volumes across all segments and higher aluminum prices.

Full-Year 2017 Results

For full-year 2017, Arconic reported net loss of $74 million or 28 cents per share, narrower than net loss of $941 million or $2.31 per share in 2016.

Revenues for the full year went up roughly 5% year over year to $13 billion.

Arconic Inc. Price, Consensus and EPS Surprise

Arconic Inc. Price, Consensus and EPS Surprise | Arconic Inc. Quote

Segment Highlights

Engineered Products and Solutions (EP&S): Revenues from the division came in at $1.5 billion in the fourth quarter, up 6% year over year, supported by increased aerospace volume in both airframes and engines.

Global Rolled Products (GRP): The division recorded sales of $1.2 billion in the quarter, up 15% year over year, mainly driven by robust automotive volume.

Transportation and Construction Solutions (TCS): The segment logged sales of $518 million, up 14% year over year on the back of increased volumes.

Financial Position

Arconic ended 2017 with cash and cash equivalents of roughly $2,150 million, up around 15.4% year over year.

Long-term debt went down 15.4% year over year to $6,806 million.

Outlook

Arconic issued its full-year 2018 guidance. The company expects revenues for 2018 in the range of $13.4-$13.7 billion. It also expects adjusted earnings in the range of $1.45-$1.55 per share and free cash flow to be around $500 million.

Arconic also initiated portfolio and strategy review, which is expected to be completed by the end of this year. The company also declared plans for an early debt reduction of about $500 million and a share repurchase program of up to $500 million.

Price Performance

Shares of Arconic have moved up 13.7% in the last three months, outperforming the industry’s 8.9% growth.

Zacks Rank & Stocks to Consider

Arconic currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Methanex Corporation (NASDAQ:MEOH) , Steel Dynamics, Inc. (NASDAQ:STLD) and Air Products and Chemicals, Inc. (NYSE:APD) .

Methanex, sporting a Zacks Rank #1 (Strong Buy), has an expected long-term earnings growth rate of 15%. Its shares soared 32% over the last six months. You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics, also a Zacks Rank #1 stock, has an expected long-term earnings growth rate of 12%. Its shares have moved up 30.1% in a year’s time.

Air Products, a Zacks Rank #2 (Buy) stock, has an expected long-term earnings growth rate of 14.1%. Its shares rallied around 17% over a year.

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