Alcoa earnings more than doubled from a year earlier in the third quarter of 2026, and its shares rose 5.8% on October 16 following the results. The aluminum producer reported net income attributable to the company of $483 million, or $1.81 per share. The improvement was less uniform against the preceding quarter: reported profit increased, but revenue and adjusted earnings declined.
Key Takeaways
- Third-quarter net income rose to $483 million from $232 million a year earlier.
- Adjusted EBITDA increased sharply year over year but fell $112 million from the second quarter.
- Alcoa maintained its annual production outlook while advancing an acquisition expected to close in the first half of 2027.
Table of Contents
- Alcoa earnings show different annual and quarterly trends
- Higher production did not prevent a sequential revenue decline
- Cash balance includes acquisition financing
- Production outlook holds, with fourth-quarter cost pressure
- Conclusion
Alcoa earnings show different annual and quarterly trends
Shares traded at $42.72 in the October 16 snapshot, following the company's October 15 results announcement. The 5.8% advance is a market snapshot rather than a confirmed closing return.
Alcoa's third-quarter 2026 earnings announcement put revenue at $3.704 billion, compared with $2.995 billion a year earlier and $3.966 billion in the second quarter. Earnings per share increased from $0.88 a year earlier and $1.53 in the preceding quarter.
Adjusted net income was $485 million, or $1.82 per share, compared with an adjusted loss of $6 million a year earlier. However, it declined from $562 million, or $2.12 per share, in the second quarter. Adjusted EBITDA excluding special items reached $789 million, up from $270 million a year earlier but down from $901 million sequentially.
| Item | Details |
|---|---|
| 2026 alumina production guidance | 9.5–9.6 million metric tons; reaffirmed. |
| 2026 alumina shipment guidance | 11.5–11.6 million metric tons; reaffirmed. |
| 2026 aluminum production guidance | 2.4–2.6 million metric tons; reaffirmed. |
| 2026 aluminum shipment guidance | 2.6–2.8 million metric tons; reaffirmed. |
Higher production did not prevent a sequential revenue decline
Alumina production rose 11% from the second quarter to 2.5 million metric tons, primarily because of improved stability at the Pinjarra refinery in Australia. Aluminum production increased 2% to 649,000 metric tons, supported by capacity restarts and completion of the Alumar smelter restart in Brazil.
Higher output did not translate directly into higher quarterly sales. Aluminum shipments fell 5% after elevated second-quarter volumes, while lower realized aluminum prices also weighed on revenue. Improved production costs and higher alumina prices were insufficient to prevent the sequential decline in adjusted EBITDA.
Reported net income nevertheless increased from the second quarter. Alcoa attributed that improvement partly to favorable mark-to-market changes in its Ma'aden shares and energy contracts, alongside lower production costs and higher alumina prices. That distinction helps explain why reported profit rose while adjusted earnings fell.
Cash balance includes acquisition financing
Alcoa generated $643 million in operating cash flow and $472 million in free cash flow during the quarter. It ended the period with $4.4 billion in cash, including $2.6 billion raised to finance the planned acquisition of South32's interests in bauxite, alumina and aluminum assets, known as AliGroup.
The financing component matters: the quarter-end cash balance was not solely the product of operating cash generation. South32 shareholders approved the transaction on October 15, 2026, and Alcoa said completion remained on track for the first half of 2027.
Production outlook holds, with fourth-quarter cost pressure
Alcoa reaffirmed its 2026 production and shipment projections. Management expects higher production and shipments in both segments in the fourth quarter, but also identified cost pressures in aluminum.
Higher raw-material costs and planned maintenance are expected to reduce fourth-quarter Aluminum segment adjusted EBITDA by approximately $30 million sequentially. Alumina costs within that segment are expected to have a separate unfavorable impact of approximately $30 million. These are management expectations, not completed-quarter results.
Conclusion
The next operating test is whether higher fourth-quarter output can offset the cost pressures Alcoa has identified. Separately, the AliGroup acquisition remains pending, with completion targeted for the first half of 2027.
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