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Arconic Inc

Arconic beats estimates in second quarter and raises guidance

Arconic posted net income of $212mln - up from $135 million in the same period last year

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“Arconic delivered another solid quarter. The business increased revenue and profitability, continued to expand margins and take out cost,” said Hess.

Shares of aluminium group Arconic Inc (NYSE:ARNC) raced up 6% in pre-market deals before nudging almost a percent lower as trade began after posting its second quarter results.

The firm beat the Street's estimates for second-quarter profit and sales and raised its guidance.

In the three months to end June, Arconic, one of whose products was used in the cladding at the Grenfell Tower, in West London,  said it had net income of $212mln -  up from $135 million in the same period last year.

Not including special items, EPS (earnings per share) came to 32 cents, ahead of consensus of 26 cents, while revenue rose 1% to $3.3 billion, also ahead of consensus of $3.2bn.

Arconic said it was raising its full-year guidance after the solid first half, and now expects revenue of $12.3bn, up from $11.8 billion to $12.4 billion, previously.

“Arconic delivered another solid quarter. The business increased revenue and profitability, continued to expand margins and take out cost.

"We ended the first half of 2017 with significantly less debt, a strong cash position and good liquidity. We are pleased to update our guidance for the year, reflecting our increased confidence in 2017 performance,” said Arconic interim chief executive David Hess.

Reynobond PE, one of Arconic’s products, was one component of the overall cladding system installed on Grenfell Tower in London, the site of last month’s tragic fire, the firm noted in its results.

"Our Reynobond products, including Reynobond PE, are permitted to be used in accordance with local codes and regulations in the United States, UK and other countries around the world," it said, adding that "as it relates to Arconic’s position in the supply chain, we believe we have been compliant in the sale of our product".

"Given the tragedy at Grenfell Tower, and out of an abundance of caution as Arconic does not control the ultimate design and installation of the final cladding system, the Company announced on June 26th that it would no longer sell the PE product for use in high-rise construction – regardless of the local codes and regulations."

Hess added: "We extend our deepest sympathies to those who have lost so much. Everyone at Arconic continues to keep them in our thoughts. And importantly, we remain committed to supporting the investigations that are seeking an outcome that makes it unlikely that a similar tragedy will ever recur."

Quick facts: Arconic Inc

Price: $26.77

Market: NYSE
Market Cap: $11.78 billion
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