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01 MAY 2018 AL CIRCLE

Arconic reported improved revenue in Q1 2018; net income drops due to higher aluminium prices

EDITED BY : BEETHIKA BISWAS 2MINS READ

Arconic Inc. reported revenues of $3.4 billion for the first quarter 2018, up 8% year over year. Organic revenue was up 4% year over year, driven by higher volumes in the aerospace engines, automotive, commercial transportation, building and construction, industrial and defence markets.

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Net income stood at $143 million compared to $322 million in the first quarter 2017. First quarter 2018 Operating income was $333 million, up 18% year over year. Operating income excluding special items was $345 million, down 12% year over year due to higher aluminium prices and performance shortfalls in Rings, Disks and Global Rolled Products operations

Arconic Chief Executive Officer Chip Blankenship said, “In the first quarter, Arconic delivered solid organic revenue growth and free cash flow in line with expectations. Operating income was negatively impacted by higher aluminum prices and performance shortfalls in our Rings, Disks and Global Rolled Products operations…To ensure all businesses execute consistently, we are deploying targeted capital and expertise to close gaps. In addition, we are updating our full year 2018 guidance due to rising aluminum prices and my deeper understanding of our operations.”

Arconic ended the first quarter 2018 with cash on hand of $1.2 billion and cash used for operations was $436 million. Free Cash Flow for the quarter was negative $417 million.

Engineered Products and Solutions (EP&S) reported revenue of $1.5 billion, an increase of 4% year over year. Organic revenue was up 2% driven by solid volume growth. Segment operating profit was $221 million, down $26 million year over year.

Global Rolled Products (GRP) reported revenue of $1.4 billion, an increase of 9% year over year. Organic revenue1 was up 4%. Segment operating profit was $112 million, down $24 million YoY, driven by higher aluminium prices and unfavorable product mix, partially offset by higher automotive volume.

Transportation and Construction Solutions (TCS) delivered revenue of $537 million, an increase of 18% YoY. Organic revenue was up 13%. Segment operating profit was $67 million, down $1 million YoY, driven by higher aluminium prices and unfavourable product price and mix.

In January 2018, Arconic initiated a review of its strategy and portfolio. The Company is targeting to complete the work in the third quarter 2018. Arconic updated its Full Year 2018 Guidance to revenue of $13.7-$14.0 billion and a Free Cash Flow of about $250 million.


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EDITED BY : BEETHIKA BISWAS 2MINS READ

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