Arconic Posts Fourth-Quarter Net Loss, Flat Revenue

Aluminum parts supplier Arconic Inc. reported a net loss and flat revenue for the fourth quarter and similar results for the full-year period as the company began to operate as a stand-alone entity.

On Nov., 16 Alcoa Inc. separated into two companies: Arconic Inc. —the new name for Alcoa Inc. —and Alcoa Corp., Arconic said. Its earnings include one month of Alcoa Corp. for fourth-quarter 2016 and 10 months of Alcoa Corp. for full-year 2016.

Arconic posted a net loss in the quarter ended Dec. 31 of $1.2 billion, or $2.88 per share, compared with a loss of $765 million, or $1.64 a year earlier, the New York-based company said.

Revenue in the quarter was flat at $3 billion year-over-year.

For the full year, its net loss increased to $868 billion, or $2.28, compared with a loss of $197 million, or 93 cents, in the 2015 period.

Annual revenue dipped to $12.39 billion, down from $12.41 billion in the 2015 period.

The company supplies the commercial truck market with aluminum wheels, truck cabs and frames, Arconic said, adding all the segments were affected by lower heavy-duty volumes in North America. The company also supplies parts to the aviation and auto industries.

Separately, the company’s board announced it unanimously supports Klaus Kleinfeld as Arconic’s chairman and CEO.

That followed the hedge fund Elliott Management Corp.’s effort to oust Kleinfeld from the company given its performance.

The company should consider replacing Kleinfeld with Larry Lawson, former CEO of Spirit AeroSystems Holdings Inc., whom Elliott has hired as a consultant, the New York-based hedge fund said in a  presentation Jan. 31. Elliott, run by billionaire Paul Singer, also announced five nominees to Arconic’s board, Bloomberg News reported.

The hedge fund is Arconic’s largest stockholder with 10.5% of shares outstanding and already has three representatives on the board, carryovers from Alcoa. A successful proxy fight could give it a majority, according to Bloomberg.