Arconic profits and sales rise as it weighs future

Aluminum, titanium parts maker expects to complete strategy review in current quarter

MICAH MAIDENBERG Arconic Inc. reported stronger revenue and profits in the third quarter, as results for the maker of aluminum and titanium parts were helped by robust demand from customers in the aerospace and automotive industries. Meanwhile, Arconic said Tuesday it continues to conduct a strategy review, one that is now expected to be complete in current quarter. The Wall Street Journal reported in July that at least two private-equity groups were considering purchasing Arconic in a leveraged buyout.

For the third quarter, Arconic reported earnings of $161 million (U.S.), or 32 cents a share, compared with $119 million, or 22 cents a share, a year earlier. Analysts surveyed by FactSet expected earnings of 29 cents a share.

Sales rose 9% from the year earlier to $3.52 billion, surpass- ing the $3.49 billion analysts expected. However, sales dipped 1.4% from the second quarter.

Higher volumes across all segments boosted Arconic’s performance in the quarter, with the company reporting the strongest growth from aerospace defence firms, where revenue jumped 34%, and automotive companies, where sales increased 31%.

Arconic said it was both helped and hurt by aluminum prices, which have risen this year amid a 10% tariff the Trump administration imposed on imports of the metal.

The company said higher aluminum prices helped operating margins in its rolled products segment, which produces aluminum sheet and plate for a range of markets. But operating margins in its transportation and construction unit was hurt by higher aluminum prices.

Arconic on Tuesday reported “robust interest” from buyers for its building and construc- tion systems business. The company has been shopping the unit, which made the aluminum panels involved in the deadly June 2017 fire that engulfed Grenfell Tower in London and left 72 people dead.

The company said it still expects revenue of $13.7 billion to $14 billion during 2018. But it raised its adjusted profit expectations, and now forecasts $1.28 to $1.34 a share for the year versus the previous guidance of $1.17 to $1.27 a share.