Arconic Inc. (NYSE:ARNC) Q4 2018 Earnings Conference Call Transcript

Feb 08, 2019 • 10:00 am ET


Arconic Inc. (NYSE:ARNC) Q4 2018 Earnings Conference Call Transcript


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Good morning. My name is Shelby and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Fourth Quarter 2018 Arconic Earnings Conference Call. (Operator Instructions) I would now like to turn the call over to Mr. Paul Luther, Director of Investor Relations. Please go ahead sir.

Paul Luther

Thank you, Shelby. Good morning and welcome to our Arconic's Fourth Quarter 2018 Earnings Conference Call. I'm joined by John Plant, Chairman and Chief Executive Officer; and Ken Giacobbe, Executive Vice President and Chief Financial Officer. After comments by John and Ken, we will take your questions.

I would like to remind you that today's discussion will contain forward-looking statements relating to future events and expectations. You can find factors that could cause the company's actual results to differ materially from these projections listed in today's presentation and earnings press release and in our most recent SEC filings. In addition, we have included some non-GAAP financial measures in our discussion. Reconciliations to the most directly comparable GAAP financial measures can be found in today's press release and in the appendix to today's presentation.

With that, I'd like to turn the call over to John.

John Plant

Good morning, everyone and thank you for joining the call today. I'm going to begin with a brief introduction and then pass across to Ken, he'll take you through the financial results and guidance in a little bit more detail. And after that, I intend to provide an update on the strategy going forward of Arconic. And then we'll take your questions.

Let me begin by saying that I plan to lead Arconic through its new direction. I'm going to try to explain that plan in more detail during the call. My background is that I was CEO of TRW Automotive from 2003 to 2015 until it was sold to ZF, a German corporation. At that time, TRW employed 65,000 people plus or minus 190 facilities and generated nearly $18 billion of revenue per year.

It was ranked amongst the 10 top global automotive suppliers. I've been a Director of Arconic since early 2016. Joining the team with me is Elmer Doty, also a current Director of Arconic, and he will serve as President and Chief Operating Officer, and he's going to focus on enhancing the company's operations. He has extensive experience in Arconic's core markets including aerospace and defense. And now Elmer's going to help support me in charting a new direction for the company and deliver value to the shareholders.

Turning to Slide 5, and commenting on the fourth quarter and the highlights for 2018. Revenue for the fourth quarter was up 6% year-over-year. And if you adjust out for things like FX or aluminum, it's up 10% organically. Revenue for the full year was up 8% and 7% organically.

Volume was up in each segment and all our main end markets remain healthy. Demand for products is strong. Excluding special items, operating income was down 6% in the fourth