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Core Insights - Alcoa reported revenue of $3.45 billion for the quarter ended December 2025, reflecting a 1.1% decrease year-over-year, but exceeding the Zacks Consensus Estimate by 6.34% [1] - The company's EPS was $1.26, up from $1.04 in the same quarter last year, representing a surprise of 32.63% over the consensus estimate of $0.95 [1] Financial Performance - Alcoa's average realized price per metric ton of alumina was $341.00, surpassing the analyst estimate of $334.30 [4] - The average realized price per metric ton of aluminum was $3,749.00, compared to the analyst estimate of $3,724.71 [4] - The average cost per metric ton of aluminum shipped was $2,478.00, lower than the estimated $2,679.38 [4] - Total sales for alumina were $1.44 billion, exceeding the estimate of $1.32 billion, but down 41.2% year-over-year [4] - Total sales for aluminum reached $2.37 billion, slightly below the estimate of $2.45 billion, with a year-over-year increase of 24.7% [4] - Third-party sales of bauxite were $173 million, exceeding the estimate of $160.89 million, with a year-over-year increase of 35.2% [4] - Total third-party sales amounted to $3.45 billion, compared to the average estimate of $3.34 billion, reflecting a 1.1% decrease year-over-year [4] Market Performance - Alcoa's shares have returned 19.1% over the past month, significantly outperforming the Zacks S&P 500 composite's 0.7% change [3] - The stock currently holds a Zacks Rank 1 (Strong Buy), indicating potential for outperformance in the near term [3]

Core Insights - Alcoa reported a strong fourth quarter for 2025, with increased revenue and adjusted EBITDA driven by higher aluminum prices and production records across multiple facilities [4][7]. Production and Operational Performance - The company achieved annual production records at five smelters and one refinery, with 16 consecutive years of increased production at Deschambault in Canada and eight years at Mosjøen in Norway [2]. - The San Ciprián smelter restart is progressing well, reaching about 65% capacity by the end of 2025, with full restart expected in the first half of 2026 [1][6]. Financial Results - Alcoa's Q4 revenue was $3.4 billion, a 15% sequential increase, with adjusted EBITDA rising to $546 million, up $276 million sequentially [7]. - The company recorded a net income of $226 million, with adjusted net income of $335 million or $1.26 per share [8]. Cash Flow and Balance Sheet - Alcoa ended December with $1.6 billion in cash and $1.5 billion of adjusted net debt, at the high end of its target range [5][12]. - Free cash flow for the full year 2025 was $594 million, with $294 million generated in the fourth quarter [10]. 2026 Guidance - For 2026, Alcoa expects alumina production of 9.7 to 9.9 million tons and aluminum production of 2.4 to 2.6 million tons, with anticipated headwinds in Q1 [13][16]. - Capital expenditures are projected at $750 million for 2026, with a focus on sustaining capital and environmental spending [15]. Market Commentary - Alumina pricing remains range-bound, while aluminum LME prices increased by 8% sequentially, reaching $3,200 per metric ton [19]. - The company anticipates a net benefit from the carbon border adjustment mechanism (CBAM) in 2026, estimating a positive impact of approximately $10 per metric ton [20]. Strategic Initiatives - Alcoa is negotiating to monetize a remediation site in the U.S., with an agreement expected in the first half of 2026 [21]. - The company is also focused on mine approvals in Western Australia, expecting an EPA recommendation by mid-2026 [22].

Core Viewpoint - The company reported strong Q4 2025 earnings, with adjusted EPS and revenue exceeding market expectations, driven by rising aluminum prices and CO2 compensation benefits [1] Group 1: Financial Performance - Q4 revenue reached $3.4 billion, surpassing the market consensus of $3.28 billion, and increased by 15% from the previous quarter, though slightly down from $3.5 billion year-over-year [1] - Adjusted EPS for the quarter was $1.26, significantly higher than the market estimate of $0.93 [1] - Operating cash flow improved to $537 million, up from $85 million in Q3, while free cash flow reached $294 million, compared to a negative $66 million in the previous quarter [1] Group 2: Future Outlook - For 2026, the company expects aluminum production to exceed 2025 levels, with total output projected between 2.4 million and 2.6 million tons [2] - The company warned of adverse impacts in Q1, including a $30 million hit to the alumina business due to maintenance and reduced shipments, and a $70 million impact on the aluminum business from the lack of CO2 compensation and higher restart costs [2] Group 3: Cash Position - After redeeming the remaining $141 million of 5.5% preferred notes due in 2027 by the end of 2025, the company will have a cash balance of $1.6 billion [3]

Financial Data and Key Metrics Changes - Revenue increased by 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue rising by 3% and the aluminum segment's third-party revenue increasing by 21% [9][10] - Net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [9][10] - Adjusted EBITDA was $546 million, reflecting a sequential increase of $276 million primarily due to higher metal prices [11][12] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [11] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [12] Market Data and Key Metrics Changes - FOB Western Australia alumina prices remained stable but slightly lower than the third quarter average, putting pressure on higher-cost refineries [21] - LME aluminum prices increased by 8% sequentially, reaching $3,200 per metric ton, supported by strong demand and constrained supply [23] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [30] - Alcoa is working on monetizing remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [7][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production guidance, citing strong operational performance and ongoing smelter restarts [33][34] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [42][43] Other Important Information - The company ended the year with a strong cash balance of $1.6 billion and free cash flow of $594 million for the year [13][15] - Capital expenditures for 2026 are estimated at $750 million, with a focus on sustaining capital and potential growth opportunities [17][18] Q&A Session Summary Question: Confidence in 2026 production guidance - Management believes the 2026 guidance is attainable based on ongoing smelter restarts and strong production performance [33][34] Question: Domestic supply of alumina and gallium project updates - Alcoa is open to considering U.S.-based alumina supply to reduce transportation costs and is making progress on the gallium project in Western Australia [36][37] Question: Alumina profitability and cost reduction initiatives - Management acknowledges the current cycle's challenges and emphasizes a commitment to cost management without jeopardizing future plant viability [42][43] Question: Update on idle sites and monetization - Negotiations for a primary site are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [45][46] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [51][53] Question: Capital return and net debt considerations - The company aims to maintain a strong balance sheet while balancing debt repayment and potential shareholder returns [70][72]

Financial Data and Key Metrics Changes - Revenue increased 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue up 3% and the aluminum segment's third-party revenue up 21% [9][10] - Fourth quarter net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [9][10] - Adjusted EBITDA was $546 million, with a sequential increase of $276 million primarily due to higher metal prices [11][12] - Return on equity for the year was 16.4%, the highest since 2022, and free cash flow for the year was $594 million [14][15] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [11][12] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [11][12] Market Data and Key Metrics Changes - FOB Western Australia alumina prices remained under pressure, with 60% of Chinese refineries facing margin pressures due to current pricing levels [21][22] - LME aluminum prices increased 8% sequentially, reaching $3,200 per metric ton, supported by strong demand and constrained supply [23][24] - The Midwest premium rose sharply, benefiting Alcoa's U.S. production, while the Rotterdam premium increased due to demand front-loading ahead of the CBAM implementation [27][28] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [30] - Alcoa is negotiating to monetize remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [7][8] - The company is not pursuing greenfield expansions due to high capital costs but is exploring brownfield opportunities for growth [87] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production guidance, citing strong operational performance and ongoing restarts of smelters [33][34] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [42][43] - The outlook for 2026 includes expected alumina production between 9.7 and 9.9 million tons and aluminum production between 2.4 and 2.6 million tons [16][17] Other Important Information - The restart of the San Ciprián smelter is progressing well, with approximately 65% of capacity operational by the end of 2025 [6][8] - The company recorded a non-cash charge of $144 million to impair goodwill in the alumina segment due to current alumina prices not supporting the valuation [10] Q&A Session Summary Question: Confidence in 2026 production guidance - Management believes the 2026 guidance is attainable based on ongoing smelter restarts and strong production performance [33][34] Question: Domestic supply of alumina and gallium project updates - Management is open to using U.S.-based alumina supply if it reduces transportation costs and is making progress on the gallium project [36][37] Question: Alumina profitability and cost reduction initiatives - Management acknowledges the current cycle's challenges and emphasizes a low-cost position while exploring cost reduction initiatives [42][43] Question: Update on idle sites and monetization - Negotiations for a primary site are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [45][46] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [51][53] Question: Capital return and net debt considerations - Management aims to maintain a strong balance sheet while balancing debt repayment and potential shareholder returns [68][72]

Financial Data and Key Metrics Changes - Revenue increased 15% sequentially to $3.4 billion, with the alumina segment's third-party revenue up 3% and the aluminum segment's third-party revenue up 21% [8] - Fourth quarter net income attributable to Alcoa was $226 million, slightly down from $232 million in the prior quarter, with earnings per share at $0.85 [8] - Adjusted EBITDA was $546 million, with a sequential increase of $276 million primarily due to higher metal prices [10] Business Line Data and Key Metrics Changes - In the alumina segment, adjusted EBITDA decreased by $36 million due to lower alumina prices, despite higher shipping volumes [10] - The aluminum segment's adjusted EBITDA increased by $213 million, driven by higher metal prices and lower alumina costs [10] Market Data and Key Metrics Changes - LME aluminum prices increased 8% sequentially in the fourth quarter, reaching $3,200 per metric ton, supported by strong demand and constrained supply [22] - FOB Western Australia alumina prices remained stable but were slightly lower than the third quarter average, continuing to pressure higher-cost refineries [19] Company Strategy and Development Direction - The company is focused on safety, stability, and operational excellence while advancing strategic initiatives to create value in 2026 [28] - Alcoa is negotiating to monetize remediation sites in the U.S. and expects to reach agreements in the first half of 2026 [6] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving 2026 production targets, citing strong operational performance and ongoing restarts of smelters [29] - The company anticipates challenges in the alumina segment due to pricing pressures but maintains a low-cost position on the cost curve [32] Other Important Information - The company ended the year with a strong cash balance of $1.6 billion and free cash flow of $594 million for the year [12] - Capital expenditures for 2026 are estimated at $750 million, with a focus on sustaining capital and potential growth opportunities [16] Q&A Session Summary Question: Confidence in 2026 production targets - Management believes the 2026 guidance is attainable based on the progress of smelter restarts and strong production in 2025 [29] Question: Domestic supply of alumina and gallium project updates - Alcoa is open to considering U.S.-based alumina supply to reduce transportation costs and is making progress on the gallium project in Western Australia [30][31] Question: Plans to enhance alumina segment profitability - Management is focused on cost reduction and productivity improvements while maintaining plant viability [32] Question: Update on idle sites and monetization - Negotiations for monetizing idle sites are ongoing, with a focus on maximizing value through complex arrangements rather than simple land sales [34] Question: Current status of Alumar Smelter - Alumar Smelter faced power interruptions but is expected to maintain similar production levels in the first quarter [36] Question: Impact of San Ciprián restart on EBITDA - The EBITDA impact from the San Ciprián restart is included in the $70 million guidance down, with $20 million specifically related to San Ciprián [50] Question: Western Australia mine approvals timeline - The company anticipates receiving recommendations from the EPA by the end of the first half of 2026, with ministerial approvals expected by year-end [51]

Core Insights - The company reported a fourth-quarter profit of $226 million, which represents an increase from $202 million in the same quarter of the previous year [1] Financial Performance - Fourth-quarter profit increased by $24 million year-over-year, reflecting a growth of approximately 11.88% [1]

Core Viewpoint - Alcoa reported better-than-expected revenue and is projecting production increases in aluminum for 2026, indicating a strong supply-demand picture in the market [1][2]. Financial Performance - The company generated close to $550 million in EBITDA and over $500 million in cash, beating consensus estimates and marking a strong performance for 2025 [2]. - Record production was achieved at several facilities globally, contributing to a robust financial year [2]. Market Dynamics - Global aluminum prices are currently high, with a slight deficit in supply, particularly in North America and Europe, which are key markets for the company [3]. - Demand in North America remains strong across various sectors, including packaging and electrical conductors, while automotive demand shows some weakness [5]. Industry Trends - The aluminum industry is experiencing increased demand due to its use in data centers and AI infrastructure, with approximately 1,500 tons of aluminum required for every gigawatt of energy used in a data center [6]. - The potential for substituting aluminum for copper in certain applications is noted, with an estimated 800,000 tons of aluminum being used globally for this purpose [8]. Trade and Inventory Considerations - The company continues to navigate trade dynamics, with U.S. tariffs being covered by current metal prices, allowing for continued shipments from Canada to the U.S. market [9][10]. - Global aluminum inventories are at their lowest levels in 15 years, indicating a tight market, although production from Indonesia is expected to ramp up in 2026 [12]. Future Investments - The company has considered investing in smelting capabilities in Greenland, contingent on securing low-cost energy, which is essential for building new aluminum capacity [15][16]. - Infrastructure development in Greenland would be necessary, including hydro facilities, which would require time to establish [17].

4 th Quarter Earnings Alcoa Corporation This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include those containing such words as "aims," "ambition," "anticipates," "believes," "could," "develop," "endeavors," "estimates," "expects," "forecasts," "goal," "intends," "may," "outlook," "potential," "plans," "projects," "reach," ...