Alcoa Declared Updated Outlook for Q4 This Year

SEATTLE (Scrap Monster): Pittsburgh-based Alcoa Corporation today welcomed the U.S. Treasury Department’s guidance on Section 45X of the Advanced Manufacturing Tax Credit. Furthermore, the company updated its outlook for fourth quarter of 2023.

According to the company, the guidance enacted as part of the Inflation Reduction Act (IRA), clarifies that commercial grade aluminum can qualify for the credit. The company expects to record an after-tax benefit in Cost of goods sold between $35 million and $40 million in the fourth quarter of the current year, related to its Massena, New York and Warrick, Indiana smelters. This is equivalent to $0.20 to $0.22 per share, it noted.

The company plans to submit written comments to the Treasury with regards to the definition of production costs. Meanwhile, it appreciated the Biden administration for implementing the IRA and the guidance on Section 45X.

Alcoa press release noted that it expects to record a valuation allowance on certain deferred tax assets in Brazil which will result in a charge to tax expense of $140 million to $150 million, or $0.78 to $0.84 per share. Approximately $100 million of this charge is discrete, thus resulting in net loss of $40 to $50 million. This in turn may impact the adjusted loss per share during the quarter.

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