Alcoa sees 'benefit' to costs, after government's clarification on tax credit
Aluminum-production giant Alcoa Corp. (AA) on Monday said it expected a "benefit" to production costs related to two of its smelting facilities in New York and Indiana, after the U.S. government said that commercial-grade aluminum could qualify for a manufacturing-related tax credit. The company said it expected to "record a benefit in cost of goods sold" of between $35 million and $40 million after taxes, or 20 to 22 cents a share, related to the two facilities in the fourth quarter. The announcement came after the U.S. Treasury Department offered additional detail on the Advanced Manufacturing Tax Credit, which was enacted as part of last year's Inflation Reduction Act, a law intended to combat rising prices. That credit, Alcoa said, was "designed to incentivize domestic production of critical materials important for the transition to clean energy." Separately, Alcoa said it expected to record a valuation allowance on some deferred tax assets in Brazil, resulting in a charge to tax expense of $140 million to $150 million, or 78 cents to 84 cents per share. The company said that around $100 million of the charge, or 56 cents a share, was "discrete," resulting in a net loss of $40 million to $50 million, which translated to a fourth-quarter adjusted per-share loss of 22 cents to 28 cents. Shares rose 0.3% after hours.
-Bill Peters
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12-18-23 1750ET
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