Arconic announced q1 2018 results electricity in water

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Arconic Inc announced that first quarter 2018 results, for which the Company reported revenues of USD 3.4 billion, up 8% year over year. Organic revenue1 was up 4% year over year, driven by higher volumes in the aerospace engines, automotive, commercial transportation, building and construction, industrial and defense markets, somewhat offset by declines in aerospace airframe production mix and the industrial gas turbine market.

Net income in the first quarter was USD 143 million, or USD 0.29 per share. These results include USD 26 million in special items, principally due to costs associated with the early redemption of debt and restructuring-related charges. First quarter 2017 net income was USD 322 million, or USD 0.65 per share. Net income excluding special items was USD 169 million, or USD 0.34 per share, versus USD 169 million, or USD 0.33 per share, in the first quarter of 2017.

First quarter 2018 Operating income was USD 333 million, up 18% year over year. Operating income excluding special items was USD 345 million, down 12% year over year, as the unfavorable impacts of higher aluminum prices, performance shortfalls in our Rings, Disks and Global Rolled Products operations, unfavorable aerospace wide-body production mix, and the inventory impact of the new pension accounting standard more than offset volume gains and net cost savings.

Mr Chip Blankenship CEO of Arconic said that “In the first quarter, Arconic delivered solid organic revenue growth and free cash flow in line with expectations. Operating income was negatively impacted by higher aluminum prices and performance shortfalls in our Rings, Disks and Global Rolled Products operations. During the quarter, I visited several sites and was impressed by our dedicated talent and world-class facilities. However, it is clear that we have areas in need of operational improvement. To ensure all businesses execute consistently, we are deploying targeted capital and expertise to close gaps. In addition, we are updating our full year 2018 guidance due to rising aluminum prices and my deeper understanding of our operations.”

Arconic ended the first quarter 2018 with cash on hand of USD 1.2 billion. Cash used for operations was USD 436 million, driven by the normal first quarter build in working capital and semi-annual interest payments, as well as higher pension contributions; cash used for financing activities totaled USD 542 million, reflecting the payment of USD 517 million for the early redemption of debt; and cash provided from investing activities was USD 29 million. Free Cash Flow for the quarter was negative USD 417 million, which included USD 124 million of incremental pension contributions compared to last year.

The Company reduced its pension liability by USD 315 million in the first quarter 2018 driven by cash contributions and as a result of its decision to freeze US defined benefit pension plans for all US-based salaried and non-bargained hourly employees.

EP&S reported revenue of USD 1.5 billion, an increase of 4% year over year. Organic revenue1 was up 2% as volume growth in aerospace engines, defense and industrial more than offset the continued downturn in the industrial gas turbine market and headwinds in aerospace airframe production mix, related to fastening systems. Segment operating profit was USD 221 million, down USD 26 million year over year, as performance shortfalls in Rings and Disks, unfavorable product mix, and higher input costs more than offset the strength in aerospace engines. Segment operating margin was 14.3%, down 230 basis points year over year.

GRP reported revenue of USD 1.4 billion, an increase of 9% year over year. Organic revenue1 was up 4%. Segment operating profit was USD 112 million, down USD 24 million year over year, driven by higher aluminum prices and unfavorable aerospace wide-body production mix, partially offset by higher automotive volume. Segment operating margin was 8.2%, down 270 basis points year over year, including a 170 basis point negative impact of higher aluminum prices.

TCS delivered revenue of USD 537 million, an increase of 18% year over year. Organic revenue1 was up 13%. Segment operating profit was USD 67 million, down USD 1 million year over year, as higher volume in commercial transportation and building and construction, favorable foreign currency movements, and net cost savings were more than offset by headwinds that included higher aluminum prices and unfavorable product price and mix. Segment operating margin was 12.5%, down 240 basis points year over year, including a 350 basis point negative impact of higher aluminum prices.