Alcoa Reports Q3 2026 Revenue of $3.7 Billion, Net Income of $483 Million

Alcoa (NYSE: AA ) reported third-quarter financial results on Thursday. The transcript from the company's third-quarter earnings call has been provided below. This transcript is brought to you APIs. For real-time access to our entire catalog, please visit for a consultation.

View the webcast at Summary Alcoa Corporation reported strong Q3 2026 performance with revenue of $3.7 billion despite lower metal prices, and net income of $483 million, up from $407 million in the prior quarter. The company completed a significant performance recovery at the Pinjarra refinery and increased aluminum production, setting six-year-to-date production records. Alcoa reached a definitive agreement to sell a portion of the Massena East site, anticipating cash proceeds of up to $315 million, with an initial payment expected within six months.

The Ali Group acquisition is progressing well, with completed $2.6 billion debt financing and expected closing in the first half of 2027, after securing necessary regulatory approvals. For Q4 2026, Alcoa anticipates strong operational performance with higher production and shipments, despite some expected higher input costs and planned maintenance. Management emphasized ongoing efforts to improve safety following a fatality at the Alumar smelter, reinforcing their commitment to safety and operational excellence.

Alcoa's strategic priorities include operational excellence, value-creating growth, and disciplined capital allocation, focusing on asset monetization and post-acquisition delevering. Full Transcript OPERATOR Good afternoon and welcome to the Alcoa Corporation third quarter 2026 earnings presentation and conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.

After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your phone. To withdraw your question, please press star then two. Please note this event is being recorded.

I would now like to turn the conference over to Louis Langloua, Senior Vice President of Treasury and Capital Markets. Please go ahead. Louis Langloua, Senior Vice President of Treasury and Capital Markets Thank you and good day, everyone. I'm joined today by William Oplinger, Alcoa Corporation President and Chief Executive Officer, and Molly Beerman, Executive Vice President and Chief Financial Officer.

We will take your questions after comments by Bill and Molly. As a reminder, today's discussion will contain forward-looking statements relating to future events and expectations that are subject to various assumptions and caveats. Factors that may cause the company's actual results to differ materially from these statements are included in today's presentation and in our SEC filings. In addition, we have included some non-GAAP financial measures in this presentation.

For historical non-GAAP financial measures, reconciliations to the most directly comparable GAAP financial measures can be found in the appendix to today's presentation. We have not presented quantitative reconciliations of certain forward-looking non-GAAP financial measures for reasons noted on this slide. Any reference in our discussion today to EBITDA means adjusted EBITDA. Finally, as previously announced, the earnings press release and slide presentation are available on our website.

Now I'd like to turn over the call to Bill. Bill Oplinger, President and Chief Executive Officer Thank you, Louis, and welcome to our third quarter 2026 earnings conference call. Before discussing our results, I want to address the tragic fatality that occurred on September 16th at our Alumar smelter in Brazil. The loss of one of our colleagues has deeply affected all of us at Alcoa and our thoughts remain with his family, friends, and co-workers.

We are a company grounded in our values: act with integrity, operate with excellence, care for people, and lead with courage. Safety is fundamental to our values and it guides how we run our business. There is no production target, financial result, or business objective that is more important than ensuring every employee and contractor returns home safely every day. Over many years, we have strengthened our safety systems and dedicated significant resources to improving safety performance.

Those efforts have resulted in meaningful progress in many areas of our business, but when we lose a colleague, progress is not enough. I am personally committed to ensuring we learn from this event and take the actions necessary to strengthen our safety culture, reduce risk across our operations, and hold ourselves accountable to the highest safety standards. This tragedy reinforces that safety requires relentless focus, constant vigilance, and an unwavering commitment from every one of us every day. With that commitment firmly in mind, I'll now turn to our third quarter results.

We continued to build operational momentum and delivered strong third quarter performance. We achieved six year-to-date production records, increased aluminum production by approximately 15,000 metric tons sequentially, completed the Alumar smelter restart, and delivered a significant performance recovery at the Pinjarra refinery. Together, these results demonstrate improving stability and disciplined execution across the portfolio. We reached a definitive agreement for the sale of a portion of the Massena East site with potential cash proceeds of up to $315 million.

We expect to receive the first $50 million to $65 million at closing, which is anticipated within six months, subject to customary permitting, regulatory approvals, key development, and closing conditions. We expect to receive the remaining cash consideration before the end of the decade. Although the agreement provides up to seven years for commissioning, this is the first transaction supporting our target to generate $500 million to $1 billion from asset monetization by 2030. The Ali Group acquisition continues to advance.

The asset's strong first half 2026 performance reinforces our confidence in the strategic and financial rationale for the transaction. S32 shareholders approved the transaction, bringing us another step closer to our expected closing in the first half of 2027. Let me now provide an update on our progress toward transaction closing. Since announcing the Ali Group acquisition on June 30, we have made meaningful progress towards closing in September.

We completed the $2.6 billion debt financing and canceled the bridge facility. Completing the financing early reduced execution risk and provides certainty around funding the cash consideration. We estimate that the locked box value was more than $300 million at the end of the quarter. Based on publicly available information, including production guidance provided by S32, the regulatory approval process is progressing well across the relevant jurisdictions.

Earlier this month I met with President Ramaphosa and other key stakeholders in South Africa. Our engagement with stakeholders has been positive and we remain confident in securing the required approvals to meet our expected first half of 2027 closing timeline. Our transition and integration teams are actively preparing for ownership of the assets. This work spans the organization and is focused on maintaining operational continuity, positioning us to capture the value of the combined portfolio, and ensuring we are ready to execute following closing and begin delivering synergies and broader benefits of the transaction.

Until then, the businesses will continue to operate independently. Now I'll turn it over to Molly to review the financial results. Molly Beerman, Chief Financial Officer Thank you, Bill. Third quarter revenue was $3.7 billion, with the sequential change primarily reflecting lower metal prices.

In the alumina segment, third-party revenue increased by 7% to $680 million, resulting from higher realized alumina prices and higher alumina shipping volumes. In the aluminum segment, third-party revenue was $3 billion, primarily reflecting lower metal prices and normalized shipment levels following the second quarter's inventory repositioning, partially offset by higher value-add product premiums. Third quarter net income attributable to Alcoa was $483 million versus the prior quarter of $407 million, with earnings per common share increasing to $1.81 per share.

On an adjusted basis, net income attributable to Alcoa remained strong at $485 million compared with $562 million in the second quarter. Let's discuss the factors affecting adjusted EBITDA. Adjusted EBITDA was $789 million, as strong operational performance and higher alumina prices partially offset lower metal prices. The alumina segment adjusted EBITDA increased $95 million on higher realized alumina prices and improved operational performance at Pinjarra.

As we regained stability in the third quarter, the aluminum segment continued to deliver productivity gains, including higher molten production, improved stability, and disciplined cost performance. These benefits were more than offset by the impact of lower metal prices, lower shipments, and higher carbon costs, resulting in segment adjusted EBITDA of $862 million. Moving to cash flow activities for the third quarter of 2026, we ended the third quarter with a cash balance of $4.4 billion, which includes $2.6 billion of cash from the bond issue completed in September.

Together with cash on hand, the net proceeds from the bond issue will be used to fund the $3.1 billion cash consideration for the Ali Group acquisition at closing. Securing the financing now avoids access and pricing risks in a volatile bond market. The quantum issue also reflects the strength of our balance sheet and cash position resulting from consecutive quarters of robust free cash flow generation. In the third quarter, cash from operations was $643 million and free cash flow was $472 million, supported by strong EBITDA in the aluminum segment where the company was able to deliver metal prices to the bottom line.

Turning to our key financial metrics for the third quarter and year to date, 2026 return on equity through the first nine months of 2026 was 25.3%. Year to date, we have returned $80 million in cash to shareholders through our regular quarterly dividend. The company generated free cash flow of approximately $600 million in the first nine months of the year. As we look toward closing the Ali Group acquisition, our strengthened balance sheet, secured financing, and substantial cash position provide ample capacity to fund the transaction.

This is the result of disciplined capital allocation, strong cash generation, and consistent operating performance. Moving on to the outlook for the full year outlook shown here, we have made only minor adjustments for transformation expenses, depreciation, interest expense, and capital expenditures. For the fourth quarter, we continue to expect strong operating performance across both segments, continuing the momentum from the third quarter. We are expecting higher production and shipments in both segments as the improved refining system stability is maintained and the smelting portfolio continues to deliver productivity through incremental output and cost discipline.

While we expect some higher direct input costs from elevated market prices and planned maintenance to support continued operational stability, the underlying performance remains very strong headed into the final quarter of the year. Please refer to the business considerations on Slide 34 of this presentation for additional details on the fourth quarter outlook. Now I'll turn it back to Bill. Bill Oplinger, President and Chief Executive Officer Thanks, Molly.

In alumina, the market tightened outside China during the quarter, with the API increasing sequentially to approximately $370 per metric ton. We expect further tightening in the fourth quarter and into 2027, driven by announced curtailments and project delays, and uncertainty in Indonesia around new supply additions. At the same time, recovering aluminum production in the Middle East and continued smelter ramp-ups in Indonesia should support additional alumina demand. While the timing of some capacity coming online remains uncertain, the overall market condition is constructive.

China remains well supplied from within the region as new refinery capacity has increased production and inventories. This continues to create a clear divergence between softer market conditions in China and tightening fundamentals outside China. Bauxite prices also increased sequentially with CIF China pricing reaching approximately $73 per dry metric ton. The increase was driven primarily by higher freight costs.

Our focus remains on operating our refinery safely and reliably, sustaining the recent performance improvement at Pinjarra, and maintaining disciplined cost management. Moving on to aluminum, aluminum prices moderated from recent highs but remain supported by constructive market fundamentals. On the supply side, production is gradually recovering as Middle East smelters restart and Indonesian capacity ramps up. The timing of a full recovery to pre-conflict production levels in the Middle East remains uncertain.

Global aluminum inventories remain historically low at approximately 42 days of consumption, leaving the market with limited capacity to absorb further supply disruptions or stronger than expected demand. The Midwest, Rotterdam and Japan regional premiums have moderated from elevated levels but remain supported by low inventories and regional deficits. This tightness is particularly relevant in North America and Europe, both of which remain structurally short of metal. For Alcoa, our regional presence, reliable supply and differentiated product portfolio are important elements of our commercial value proposition.

Our order book remains solid with significantly less volume available for sale than at this point last year. Most products are sold out or tightly committed. Packaging and electrical markets continue to lead demand. Transportation remains resilient and construction, particularly in Europe, remains the softest end market.

Customer sentiment is cautious but constructive with continued interest in secure supply and long-term agreements. Before we wrap up, I'd like to return to the three priorities we set at Investor Day nearly a year ago. First, Operational Excellence. As I stated at the top of our call, safety remains our top priority and the foundation of operational excellence.

We are strengthening critical risk controls, leadership behaviors and accountability. We are delivering greater stability across the portfolio, setting production records and improving productivity. We have now completed the restarts of both the San Ciprián and Alumar smelters. While the Western Australia EPA's review of our mine plan continues to advance, we are preparing our teams to execute the upcoming mine moves.

The mining approvals are taking longer than expected. Several steps remain, including the appeals process and final ministerial decisions, and we now expect the process to extend into 2027. Our confidence in ultimately securing the approvals has not changed. We have incorporated an additional six months of mining in current areas into our plans and approvals by mid-2027 are not expected to further materially affect supply, quality or cost.

We also have contingency plans available if needed. Second, Value Creating Growth. At Investor Day we were clear that we would pursue growth only where we see a compelling path to long-term shareholder value. The Alley Group acquisition reflects that discipline and we will apply the same standard to any future opportunities.

We will not pursue growth for growth's sake. Third, Disciplined Capital Allocation. We ended the third quarter with a strong balance sheet supported by robust year-to-date free cash flow. We structured the ALI Group considerations such that pro forma leverage approximates a manageable 1.5 times.

Following closing of the acquisition, delevering will be our priority. We expect to use various sources of cash such as free cash flow generation, locked box cash from the transaction, proceeds from additional transformation asset sales and the monetization of our modern shares to reduce debt over time. Given the stronger through-cycle cash flow generation of the combined portfolio, we will update our adjusted net debt target at the transaction. Closing the Massena East agreement also represents meaningful progress against our asset monetization strategy.

These actions demonstrate that we are executing the strategy we presented at Investor Day and strengthening Alcoa for long-term value creation. To wrap up, we are proud of what we accomplished in the third quarter, excited about the opportunities ahead and confident in our ability to deliver value for our shareholders. With that, operator, please begin the Q and A session. OPERATOR Thank you.

We will now begin the question and answer session. To ask a question, you may press star, then one on your phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two.

When called upon, please limit yourself to two questions. And our first question comes from Carlos d' Alba with Morgan Stanley. Please go ahead. Carlos d'Alba, Analyst at Morgan Stanley Yeah, thank you very much.

Good afternoon, Bill and Molly. So the first question that I have is on the guidance. So maybe flat alumina, it's a little bit surprising to us given what we believe has been higher spot prices in recent months. And I know there is some lagging effects there, but that was a little bit of a surprise to us maybe.