Arconic reports improved revenue in Q4 2018 driven by double-digit growth in major end markets

Arconic Inc. reported fourth quarter 2018 and full year 2018 results. The company delivered revenues of $3.5 billion in Q4 2018, up 6% year over year. Organic revenue was up 10% YoY, driven by higher volumes across all segments with double digit growth in most major end markets. For full year 2018, revenue was $14.0 billion, up 8% YoY. Organic revenue was up 7% YoY.

The company reported net income of $218 million in Q4.For full year 2018, net income stood at $642 million, from a net loss of $74 million in full year 2017.  

Net income excluding special items was $162 million, from $152 million in Q4 2017. The increase was driven by higher volumes and lower expenses for pension, interest, and taxes, largely offset by higher aluminium prices and unfavourable product mix. Full year 2018 net income excluding special items stood at $676 million.

Arconic reported operating income of $323 million, from an operating loss of $433 million in Q4 2017. Operating income excluding special items was $323 million, from $343 million in Q4 2017, down 6% year over year, as volume growth was more than offset by aluminium price impacts and unfavourable product mix.

Full year 2018 operating income was $1.3 billion versus $480 million in the full year 2017. Operating income excluding special items was $1.4 billion versus $1.5 billion in the full year 2017.

Arconic Chairman and Chief Executive Officer John Plant said, “Our team improved quality and delivery to customers in the face of increasing demand and record level shipment volumes in some segments. Our continuous improvement efforts are gaining traction. Furthermore, we have commenced plans to reduce operating costs by approximately $200 million on an annual run-rate basis.”

Fourth Quarter 2018 Segment Performance 

Engineered Products and Solutions (EP&S) delivered revenue of $1.6 billion, up 8% YoY. Organic revenue was up 9%, driven by volume growth in aerospace engines and defence. Segment operating profit was $220 million, down $8 million YoY.

Global Rolled Products (GRP) reported revenue of $1.4 billion, up 9% YoY. Organic revenue was up 13%. Segment operating profit was $77 million, down $14 million YoY, driven by aluminium price headwinds, higher transportation costs and scrap spreads, which were partially offset by pricing actions and higher volume in automotive, commercial transportation and aerospace.

Transportation and Construction Solutions (TCS) delivered revenue of $497 million. Organic revenue was up 4%. Segment operating profit was $63 million, down $14 million year over year, driven by aluminium price headwinds, which were partially offset by growth in commercial transportation and building and construction.