Earnings call transcript: Alcoa tops Q3 2026 EPS forecast as revenue misses

Alcoa reported third-quarter 2026 earnings that exceeded profit expectations, but revenue fell short of forecasts. The company generated $1.82 in earnings per share, surpassing the $1.54 analyst forecast by 18.18%. Revenue came in at $3.7 billion, which was 2.12% below the $3.78 billion forecast due to lower metal prices impacting sales.

In the quarter, Alcoa reported $472 million in free cash flow and $600 million in free cash flow year-to-date. The company achieved six production records year-to-date and saw an increase in aluminum production by approximately 15,000 metric tons sequentially. The Pinjarra refinery in Western Australia also recovered after encountering earlier issues.

Management attributed the revenue shortfall to lower metal prices but emphasized that the profit beat was significant due to favorable product mix and higher alumina prices. Alcoa's adjusted earnings per share of $1.82 exceeded the $1.54 consensus estimate. The stock is currently trading at a P/E ratio of 8.38 and a PEG ratio of 0.34, indicating an attractive valuation relative to growth prospects.

InvestingPro analysis suggests the stock is undervalued at current levels and is listed among the platform's Most Undervalued equities. Alcoa's performance indicates solid execution in a challenging pricing environment. Management expects continued strong operating performance into the fourth quarter, including higher production and shipments in both the alumina and aluminum segments.