Photographer: Luke Sharrett/Bloomberg

Alcoa Plunges Most Since 2016 as Profit Disappoints on Costs

Updated on
  • The stock decline comes after shares rose 92% last year
  • As earnings rose, so did expenses for energy and raw materials

Alcoa Corp. slid the most in more than 15 months after one of last year’s best-performing metal producers missed earnings estimates as higher input costs offset surging aluminum prices.

The Pittsburgh-based company fell 7.2 percent to $52.87 at 9:37 a.m. in New York, the largest intraday decline since Oct. 11, 2016. The earnings were released after the close of regular trading on Wednesday.

Fourth-quarter profit came up short on the accounting impact of inventory changes and higher-than-expected energy costs, Curt Woodworth at Credit Suisse said. Alcoa’s shares surged 92 percent last year as the prospect of China shutting outdated and polluting plants boosted aluminum prices. It was the company’s biggest annual gain since 1999 and happened during its first year since splitting from parts-maker Arconic Inc. in late 2016.

“People are not happy about the fourth-quarter miss,” Andrew Cosgrove, the senior analyst of energy and mining equities at Bloomberg Intelligence, said in an email. “Also, investors were a bit underwhelmed on the 2018 guidance. Most seriously underestimated the impact raw materials would have on 2018 numbers.”

Earnings excluding one-time items were $1.04 a share, missing the $1.23 average of 11 estimates compiled by Bloomberg. Sales climbed 25 percent to $3.17 billion, trailing the $3.29 billion estimate.

The fourth-quarter net loss widened to $1.06 a share from a 68-cent loss a year earlier, Alcoa said Wednesday in a statement.

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