Why Alcoa Stock Popped on Friday
Key Points
Alcoa doubled its profit in Q3 and grew sales 24%.
Management is holding firm on shipments estimates for the rest of this year, but warned of higher costs.
- 10 stocks we like better than Alcoa ›
Traditionally one of the first big companies to report results in any earnings season, Alcoa (NYSE:AA) stock started off the Q3 rush with some great news last night: Alcoa beat earnings.
Heading into the report, analysts had Alcoa pegged for a $1.54 per share profit, but the aluminum giant actually earned $1.82 per share (adjusted for one-time items). Granted, sales fell a bit short -- $3.7 billion versus analysts' hoped-for $3.8 billion.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
But at least the earnings were good.
Image source: Getty Images.
Alcoa Q3 earnings
Really good. Alcoa grew its sales 23.7%, which is an impressive number even if it did "miss estimates." But Alcoa's earnings were even better. Profits flipped from negative to positive on an adjusted basis, and earnings calculated under generally accepted accounting principles (GAAP) more than doubled to $1.81 per share (just a penny less than the "adjusted" number).
Furthermore, Alcoa generated a respectable $472 million in free cash flow for the quarter, backing up 97.7% of reported net income with real cash profit.
Profit margins increased nicely, growing from 7.7% to 13%, and CEO William F. Oplinger says that, thanks to improved refinery performance plus contributions from acquisitions, Alcoa increased its production of aluminum in the quarter as well.
What's next for Alcoa
So, more aluminum produced and sold at higher margins? Sounds pretty good to me. And Alcoa is doing its best to keep the good times rolling.
Turning to guidance, management reaffirmed its target of shipping 2.6 to 2.8 million metric tons of aluminum and 11.5 to 11.6 million metric tons of alumina (aluminum oxide) this year. Input costs may be a bit higher, weighing on profitability.
Most analysts still agree Alcoa should end 2026 with $6.81 per share in profit, however, valuing the stock at a cheap 6.3x current-year earnings.
Should you buy stock in Alcoa right now?
Before you buy stock in Alcoa, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Alcoa wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $391,581!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,334,780!*
Now, it’s worth noting Stock Advisor’s total average return is 936% — a market-crushing outperformance compared to 213% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of October 16, 2026.
Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
Recommended Articles
