Alcoa cuts adjusted EBITDA forecast citing tariffs, shares slide

(Reuters) - Aluminum producer Alcoa Corp lowered its forecast for adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for 2018 on Wednesday, citing U.S tariffs on imported aluminum and rising energy costs.

An Alcoa aluminum plant in Alcoa, Tennessee, U.S. is seen in this April 8, 2014 file photo REUTERS/Wade Payne/File Photo

The company’s shares were down 4 percent in after-market trading.

Alcoa now expects adjusted EBITDA to range between $3.0 billion and $3.2 billion, compared with its previous forecast of $3.5 billion to $3.7 billion.

Alcoa said it had incurred $15 million in costs related to the tariffs. The company’s imports are mostly from Canada where the U.S. government’s Section 232 tariffs became effective on June 1.

President Trump imposed U.S. tariffs of 25 percent on imports of steel and 10 percent on aluminum in March on countries including Canada, Mexico and the European Union.

The company said that uncertainty continues to exist in the global supply chain due to the U.S. tariffs and ongoing alumina supply disruptions in the Atlantic region.

The company reported adjusted earnings of $1.52 per share, on a revenue of $2.86 billion for the second quarter ending June 30, beating Wall Street estimates according to Thomson Reuters I/B/E/S.

Reporting by Sanjana Shivdas in Bengaluru

Source link