Alcoa Q3 2026 Adjusted Earnings Fall as Aluminum Prices Weaken

Alcoa Corporation reported lower third-quarter adjusted earnings as weaker aluminum prices outweighed operational improvements and higher alumina pricing, while strong cash generation and a completed $2.6 billion debt issuance strengthened its position ahead of the planned AliGroup acquisition.

Revenue fell to $3.70 billion in the third quarter of 2026 from $3.97 billion in the preceding quarter. Adjusted EBITDA excluding special items declined by $112 million to $789 million, while adjusted net income attributable to Alcoa decreased to $485 million, or $1.82 per share, from $562 million, or $2.12 per share.

On a GAAP basis, net income attributable to Alcoa rose to $483 million, or $1.81 per share, from $407 million, or $1.53 per share, in the second quarter. Third-quarter results included $2 million of special items, compared with $155 million in the prior quarter.

Lower aluminum prices weigh on segment results

Alcoa’s realized primary aluminum price declined by $225 per metric ton sequentially to $4,527, creating a $235 million unfavorable impact on adjusted EBITDA. The realized alumina price increased by $19 to $353 per metric ton, partly offsetting the pressure.

The Aluminum segment generated adjusted EBITDA of $862 million, down from $1.07 billion in the second quarter. Lower metal prices were the largest drag, while improved production costs and other operating factors provided partial offsets. Adjusted operating cost per metric ton increased to $2,584 from $2,481 as produced aluminum shipments fell to 636,000 metric tons from 680,000 metric tons.

The Alumina segment improved to an adjusted EBITDA loss of $1 million from a $96 million loss. The Alumina Price Index and production-cost improvements supported the recovery. Produced alumina shipments rose to 2.4 million metric tons from 2.29 million metric tons, while adjusted operating cost declined to $354 per metric ton from $368.

Alcoa said it delivered six year-to-date production records and increased aluminum production by about 15,000 metric tons during the quarter. The company completed the restart of its 60% share of the Alumar smelter in Brazil and reported a strong performance recovery at the Pinjarra refinery in Australia.

Free cash flow reaches $472 million

Cash provided by operations was $643 million, and free cash flow totaled $472 million after $171 million of capital expenditures. Year-to-date free cash flow reached $596 million.

Alcoa ended September with $4.41 billion in cash and cash equivalents, up from $1.35 billion at the end of June, primarily reflecting net debt additions associated with acquisition financing. Adjusted net debt stood at $969 million. The company said its cash balance was well above the $3.1 billion cash consideration required for the AliGroup transaction.

Days working capital increased by four days sequentially to 50 days, matching the level recorded in the third quarter of 2025. Alcoa reported a year-to-date return on equity of 25.3% and $80 million in year-to-date capital returns to stockholders, including $27 million of dividend payments during the third quarter.

AliGroup transaction targets first-half 2027 closing

Alcoa continues to expect its acquisition of South32’s interests in certain bauxite, alumina and aluminum assets, referred to as AliGroup, to close in the first half of 2027, subject to remaining regulatory approvals and other conditions. South32 shareholders approved the transaction on October 15.

The company completed a $2.6 billion debt issuance in September to fund the cash portion of the transaction, reducing financing risk to closing. Regulatory reviews and integration planning remain in progress.

Preliminary pro forma information for the first half of 2026 showed combined sales of $9.1 billion and diluted earnings per share of $3.55, compared with Alcoa’s stand-alone sales of $7.2 billion and diluted EPS of $3.13. Alcoa cautioned that the pro forma figures are not indicative of future results and exclude integration costs, cost savings and transaction synergies.

Separately, Alcoa reached a definitive agreement concerning its Massena East site, with a potential cash value of up to $315 million. The company expects to receive an initial $50 million to $65 million at closing, which is anticipated within six months.

Fourth-quarter and full-year outlook

For the fourth quarter, Alcoa expects Alumina segment performance to remain consistent with the third quarter. Aluminum segment adjusted EBITDA is expected to face an approximately $30 million sequential headwind, primarily from higher raw-material costs and planned maintenance. Alumina costs within the Aluminum segment are expected to have an additional $30 million unfavorable impact.

The company expects about $20 million of favorable fourth-quarter interest income from cash held for the AliGroup acquisition. Operational tax expense is projected at approximately $65 million to $75 million, based on recent pricing and the geographic distribution of earnings.

For 2026, Alcoa maintained production ranges of 9.5 million to 9.6 million metric tons of alumina and 2.4 million to 2.6 million metric tons of aluminum. Expected shipment ranges are 11.5 million to 11.6 million metric tons for alumina and 2.6 million to 2.8 million metric tons for aluminum. Sustaining capital expenditures are projected at about $685 million, with environmental and asset-retirement-obligation payments of approximately $360 million.

The outlook remains exposed to volatility in aluminum and alumina prices, energy and raw-material costs, foreign exchange movements, tariffs, geopolitical disruption and operational performance. Completion of the AliGroup acquisition also depends on regulatory approvals and other closing conditions, and its expected benefits may not be realized on the anticipated timetable or at all.