Alcoa's Q2 Aluminum Earnings Top Estimates—But Tariff Risk Keeps Analyst Cautious

In a market landscape marked by fluctuating commodity prices and geopolitical uncertainties, Alcoa Corporation‘s (NYSE:AA) recent financial performance offers a glimpse into the evolving dynamics of the aluminum industry.

Alcoa Corporation (NYSE:AA) shares are trading higher on Thursday after the company reported its second-quarter results on Wednesday, which showed total third-party revenue of $3.0 billion, a 10% sequential decrease.

In the Alumina segment, third-party revenue decreased by 28 percent due to a decline in the average realized third-party price, partially offset by increased shipments.

BofA analyst Lawson Winde reiterated the Underperform rating on Alcoa, raising the price forecast from $26 to $27.

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Winde highlights Alcoa’s second-quarter 2025 adjusted EBITDA of $313 million, beating Bank of America estimates of $278 million and Bloomberg consensus of $292 million.

The outperformance was largely due to stronger Aluminum segment EBITDA, likely driven by lower energy costs and an improved product mix. For the third quarter of 2025, the company expects a $30 million sequential benefit, net of tariffs.

Winde has raised commodity price assumptions and lifted full-year 2025 earnings estimates, increasing the price objective.

However, the rating is maintained due to ongoing risks around Section 232 tariffs on Canadian imports and continued challenges in ramping up the loss-making San Ciprián operations.

Alcoa also cited delays in permitting at its Australian bauxite mines. For 2025, Alcoa largely maintained its guidance, aside from a slight reduction of 100–200kt in third-party aluminum shipments due to San Ciprián's slower ramp and a $25 million cut in return-seeking capital expenditures to $50 million.

The company expects alumina prices to be supported by widespread curtailments in China, where over 80% of refineries are unprofitable, although new supply from Indonesia or India poses a risk.

In aluminum, demand in North America and Europe remains steady, but pricing and the automotive sector outlook remain uncertain due to tariff-related pressures.

For the third quarter, Alcoa expects a $20 million benefit from lower maintenance and higher alumina output, plus $100 million in reduced alumina costs in the Aluminum segment—partially offset by a $90 million increase in tariff expenses.

Winde raises third-quarter EBITDA estimates to $328 million from $205 million.

Full-year 2025 EBITDA is now projected at $1.87 billion, up from $1.62 billion, with earnings per share forecast to increase to $3.19 from $2.52.

AA Price Action: Alcoa shares were up 4.17% at $29.75 at the time of publication Thursday, according to Benzinga Pro.

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