Arconic reports 4.5 % revenue growth in Q1 2017 driven by higher sales volumes

Arconic Inc. reported results for the first quarter 2017, in which the Company reported a revenue growth of 4.5 % YoY, driven by higher volumes across all segments. The impact of higher aluminium prices was offset by Arconic’s ramp down from the North American packaging business at its Tennessee operations. Excluding the ramp down costs, revenues were up 8 % YoY.

Net income was $322 million versus $16 million in first quarter 2016, which includes a gain on the sale of Alcoa Corporation shares, slightly offset by non-cash charges related to the divestiture of a rolling mill in Fusina, Italy. Excluding special items adjusted income stood at $169 million.

The company reports revenue of $3.2 billion, up 4.5% YoY. Adjusted EBITDA excluding special items stood at $485 million, up 11% YoY. Arconic reports strong net cost savings of 1.9% of revenues and a cash balance of $2.6 billion.

Commenting on the results, Arconic Interim Chief Executive Officer David Hess said,

"Solid performance, strong net cost reduction and some additional tailwinds allowed Arconic to deliver a stronger than anticipated first quarter of 2017.” “The aerospace market is continuing its transition to new platforms where we are strongly positioned. We continue to be focused on capital efficiency, growth, cost reduction and margin expansion, in line with our stated strategy. We affirm the guidance for full year 2017 provided at Investor Day last year,” he added.

Arconic expects to fully exit the North America packaging business at its Tennessee operations following the expiration of the toll processing and services agreement with Alcoa Corporation on December 31, 2018.

Engineered Products and Solutions (EP&S) reported revenue of $1.5 billion, up two per cent YoY, first-quarter Adjusted EBITDA of $306 million, up $1 million YoY. Adjusted EBITDA was driven by volume and net cost savings partially offset by ramp up costs.

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Global Rolled Products (GRP) reported revenue of $1.2 billion up five per cent YoY. The segment also reported Adjusted EBITDA of $171 million. The Adjusted EBITDA improvement was driven by net cost savings and record automotive volume, which were partially offset by reduced aero wide-body build rates, airframe destocking, reduced North America heavy duty truck (HDT) build rates and pricing pressure.

Transportation and Construction Solutions (TCS) delivered revenue of $449 million, an increase of five per cent YoY. The segment also reported first quarter Adjusted EBITDA of $72 million, up $8 million year over year. The Adjusted EBITDA improvement was driven by volume and net cost savings.