Alcoa Corporation

Alcoa just posted its biggest revenue quarter ever at 4 billion dollars, up 24 percent from the prior quarter. Profit came in at 407 million dollars, more than double the 164 million from a year ago, and adjusted EBITDA jumped 51 percent to 901 million dollars. Free cash flow hit 422 million dollars in three months alone.

Alcoa agreed to buy South32's bauxite, alumina, and aluminum assets for about 4.1 billion dollars, making it an even bigger pure play on aluminum. They also restarted smelters in Spain, Norway, and Australia, pushing aluminum production up 5 percent to 636,000 metric tons, and set year to date production records at four smelters.

A key refinery in Australia hit problems, worsened by a cyclone knocking out gas supply. Alumina production fell 6 percent to 2.2 million metric tons, and Alcoa cut its full year alumina forecast to between 9.5 and 9.6 million metric tons. Costs went up right when they needed the opposite.

Aluminum is a commodity, so Alcoa lives and dies by prices it doesn't control. This quarter's 901 million dollar EBITDA was driven mostly by favorable aluminum prices, and that same leverage works in reverse when prices drop. Tariffs on imported aluminum and higher fuel costs from Middle East conflict also took a bite.