Alcoa third-quarter net income rises to $483 million on higher alumina prices

Alcoa Corporation (AA) said Thursday that third-quarter 2026 net income rose to $483 million, or $1.81 per diluted share, from $232 million a year earlier. The figures were released in a press release furnished with an 8-K filing.

Here's how the company did:

• Revenue: $3,704 million vs. $2,995 million a year earlier
• Earnings per diluted share: $1.81 vs. 88 cents a year earlier
• Adjusted earnings per share: $1.82 vs. a loss of 2 cents a year earlier
• Adjusted EBITDA excluding special items: $789 million vs. $270 million a year earlier

Adjusted net income attributable to the company was $485 million, or $1.82 per share, after net special items of $2 million. Adjusted net income was down from $562 million in the second quarter.

Adjusted EBITDA excluding special items was $789 million, a sequential decrease of $112 million. The company said lower aluminum prices and shipments more than offset improved production costs in both segments and higher alumina prices.

Sequentially, the company said results reflected favorable mark-to-market changes on Saudi Arabian Mining Company (Ma’aden) shares and energy contracts, along with improved production costs and higher alumina prices. Notable special items included mark-to-market gains on energy contracts of $32 million and a Ma’aden share gain of $28 million.

Third-party revenue was $3.7 billion, down 7% from the second quarter. Alumina segment third-party revenue rose 7%, while Aluminum segment third-party revenue fell 9% on lower shipments and realized prices.

“During the third quarter, we advanced the AliGroup acquisition, delivered improved refinery performance, and increased production across our smelting portfolio,” said Alcoa President and CEO William F. Oplinger. “As we look ahead, we remain focused on strengthening safety performance, sustaining operational stability, and building on this momentum as we work toward closing the AliGroup acquisition in the first half of 2027.”

Cash provided from operations was $643 million, and free cash flow was $472 million after $171 million of capital expenditures. Alcoa ended the quarter with a cash balance of $4.4 billion.

Days working capital was 50, a sequential increase of 4 days, primarily on higher inventory days due to higher aluminum volumes. Days working capital was consistent with the third quarter of 2025.

For the nine months ended Sept. 30, net income attributable to Alcoa was $1,315 million, or $4.95 per diluted share, compared with $944 million, or $3.57 per diluted share, a year earlier.

Alumina production rose 11% sequentially to 2.5 million metric tons, primarily due to improved stability at the Pinjarra, Australia refinery. Aluminum production rose 2% to 649,000 metric tons, helped by capacity restarts completed in the second quarter and the completion of the Alumar, Brazil smelter restart in the third quarter.

The company said it increased aluminum production for the sixth consecutive quarter and set year-to-date production records at five smelters and one refinery.

The Aluminum segment’s Adjusted EBITDA was $862 million, down from $1,073 million in the second quarter. The Alumina segment posted a loss of $1 million, compared with a loss of $96 million in the prior quarter.

The average realized aluminum price was $4,527 per metric ton, down from $4,752 in the second quarter. The average realized alumina price was $353 per metric ton, up from $334.

Restructuring and other charges, net were $18 million, compared with $885 million a year earlier. Interest expense was $42 million, up from $33 million.

AliGroup acquisition and financing

Alcoa is acquiring South32 Limited’s interests in its bauxite, alumina and aluminum assets, which the filing calls AliGroup. South32 shareholders approved the acquisition on Thursday, and the company said the transaction remains on track to close in the first half of 2027.

Alcoa completed offerings on Sept. 23 of $1.5 billion of 6.625% senior notes due 2034 and $1.1 billion of 6.875% senior notes due 2036. The company intends to use the proceeds, together with cash on hand, to fund cash consideration of approximately $3.1 billion and related fees and expenses.

After the note offerings, the company terminated its remaining bridge financing commitments. Alcoa expects interest expense of approximately $185 million for the year, an increase from its prior projection, as a result of the notes.

Massena East site sale

During the third quarter, Alcoa entered into definitive agreements to sell portions of its Massena East site in New York, with potential proceeds of up to $315 million. The filing does not name the buyer.

The company expects to receive approximately $50 million to $65 million at closing, depending on the amount of approved data center capacity, and expects closing within the next six months.

Alcoa may receive an additional $60 million to $250 million for approved capacity expansions and capacity-based installment payments over the seven years after closing, with most of the proceeds expected in the first five years. Closing is subject to permitting, regulatory approvals and other customary conditions.

2026 outlook

Alcoa reaffirmed its 2026 alumina production projection of 9.5 to 9.6 million metric tons and its shipment projection of 11.5 to 11.6 million metric tons. It also reaffirmed aluminum production of 2.4 to 2.6 million metric tons and shipments of 2.6 to 2.8 million metric tons.

For the fourth quarter, the company expects higher production and shipments in both segments, and Alumina segment Adjusted EBITDA consistent with the third quarter. Aluminum segment Adjusted EBITDA is expected to take an unfavorable impact of approximately $30 million from higher raw material costs and planned maintenance.

Alumina costs in the Aluminum segment are expected to be unfavorable by approximately $30 million sequentially. Other income is expected to increase by approximately $20 million on higher interest earned on cash held for the AliGroup acquisition.

Operational tax expense for the fourth quarter is expected to be $65 million to $75 million, which may vary with market conditions and jurisdictional profitability.