Alcoa's Q2 2025 Profits Hit Despite Revenue Decline
Pittsburgh, Thursday, 17 July 2025.
In Q2 2025, Alcoa’s profits rose to $164 million, up from $20 million a year earlier, despite a revenue dip due to falling alumina and aluminum prices.
Financial Overview and Market Challenges
Alcoa Corporation, trading as AA on the NYSE and AAI on the ASX, reported its Q2 2025 financial results on July 16, 2025, showing significant improvements compared to the same quarter last year. The company posted a net income of $164 million, substantially higher than the $20 million reported in Q2 2024 [1]. However, revenue, despite increasing by 3.9% year-on-year, dropped sequentially from $3,369 million in Q1 2025 to $3,018 million in Q2 2025 due to declines in alumina and aluminum prices [2][3].
Operational Performance
Alcoa’s robust operational strategy resulted in flat alumina production at 2.4 million metric tons and a 1% increase in aluminum production to 572,000 metric tons for Q2 2025 [2]. The company’s operational strengths shone through despite rising tariff costs, which amounted to $115 million for aluminum imports from Canada to the U.S. [3]. Furthermore, Alcoa’s proactive measures included redirecting aluminum production from its Canadian smelters to cater to non-U.S. markets, effectively managing potential tariff impacts [2].
Strategic Transactions and Cash Flow Management
Alcoa completed the sale of its 25.1% stake in the Ma’aden joint venture on July 1, 2025, for $1.35 billion, indicating a strategic shift to streamline its portfolio [3]. This divestment contributed to a strong cash position, ending the quarter with a $1.5 billion cash balance after generating $488 million from operations in Q2 2025, reflecting a $413 million increase sequentially [1][3].
Outlook and Future Plans
Looking ahead, Alcoa anticipates a consistent performance in the alumina segment while adjusting its aluminum shipment projections due to reduced output at the San Ciprián smelter, planning to complete its restart by mid-2026 [2][3]. Despite these challenges, analysts maintain a positive outlook on Alcoa, as evidenced by a ‘buy’ rating from several financial institutions [3]. The ongoing focus remains on enhancing its operations and navigating market volatilities efficiently.