Asia Pacific income declined due to high single-digit volume decreases, impacted by tariffs and weaker consumer confidence.
Earnings for the quarter were $1.81 per share compared to $1.45 per share in the prior year quarter, with adjusted earnings per share at $2.15 versus $1.81 last year.
European beverage unit volumes grew 6%, continuing record income levels.
Free cash flow for the first six months improved to $387 million from $178 million, aided by higher income and lower capital spending.
Net sales increased 3.6% year-over-year, driven by higher shipments in North American beverage (1%), European beverage (7%), and North American food cans (5%), along with raw material cost pass-through and favorable currency translation.
North American beverage segment income increased 10%, with shipment gains in North America and Brazil.
North American food demand increased 9%, driven by strong vegetable volumes, leading to a 150% income improvement in the Other segment.
Segment income rose to $476 million from $437 million last year, reflecting volume growth and improved global manufacturing operations.
Trailing 12 months EBITDA is approaching $2.1 billion.
Adjusted EBITDA was $313 million, down $542 million sequentially due to lower alumina and aluminum prices and increased U.S. Section 232 tariff costs.
Alumina segment adjusted EBITDA decreased $525 million primarily due to lower prices and higher production, energy, and raw material costs.
Aluminum segment adjusted EBITDA decreased $37 million, impacted by $95 million in tariff costs despite price/mix improvements and higher volumes.
Cash from operations was $488 million with a working capital release of $251 million, ending the quarter with $1.5 billion in cash.
Net income attributable to Alcoa was $164 million, down from $548 million in the prior quarter, with adjusted net income at $103 million or $0.39 per share.
Second quarter 2025 revenue was $3 billion, down 10% sequentially, driven by a 28% decrease in Alumina segment revenue and a 3% increase in Aluminum segment revenue.
Second quarter dividend payments totaled $27 million.
Year-to-date return on equity was 22.5%, days working capital remained flat at 47 days, and free cash flow was positive at $357 million.
Adjusted earnings per share were $2.77, driven by strong productivity, restructuring actions, favorable FX impact, and lower interest expense, offset by higher input costs and plant shutdowns.
Adjusted operating income: Global Ceramic $90 million (8.1%), Flooring North America $69 million (7.3%), Flooring Rest of the World $76 million (10.4%).
Capital expenditures were $80 million in Q2 with planned investments reduced to approximately $500 million for 2025.
Cash and cash equivalents were $547 million with free cash flow of $126 million; share repurchases of approximately $42 million completed with a new $500 million authorization.
Gross margin was 25.5% as reported and 26.4% excluding charges, down approximately 70 basis points due to higher input costs, lower sales volume, and increased shutdown costs, partially offset by productivity gains and favorable FX.
Interest expense decreased to $5 million due to lower debt balance and interest income benefits.
Inventories increased by $130 million primarily due to FX and imported inventory from new tariffs.
Net sales for the second quarter were $2.8 billion, essentially flat as reported and on a constant basis.
Non-GAAP tax rate for Q2 was 19.3%, down from 20.9% prior year, with Q3 and full year tax rate forecasted at approximately 19%.
Nonrecurring restructuring charges of $34 million expected to deliver $100 million in annual cost savings in 2025.
Operating income on an adjusted basis was $223 million or 8% of sales, a decrease of approximately 120 basis points due to increased input costs, lower sales volume, and higher shutdown costs, partially offset by productivity and FX benefits.
Segment sales: Global Ceramic sales just over $1.1 billion (up 0.5% reported, 1.1% constant), Flooring North America sales $947 million (down 1.2%), Flooring Rest of the World sales $734 million (up 1% reported, down 3% constant).
Adjusted diluted earnings per share for the second quarter was $0.21.
Adjusted income from operations was $57 million, a 9% increase year-over-year.
Enterprise revenues, excluding fuel surcharge, were $1.3 billion, up 10% compared to 1 year ago.
Free cash flow increased approximately $10 million compared to the same period in 2024.
Intermodal operating income was $16 million, a 10% increase compared to the same period last year.
Intermodal operating ratio was 93.9%, an improvement of 30 basis points compared to second quarter 2024.
Intermodal revenues, excluding fuel surcharge, were $265 million for the second quarter, up 5% year-over-year.
Logistics income from operations was $8 million, near first quarter levels, but down 29% from last year's high watermark.
Logistics operating ratio was 97.7%, an increase of 120 basis points compared to prior year.
Logistics revenue, excluding fuel surcharge, totaled $340 million in the second quarter, up 7% from the same period 1 year ago.
Net debt leverage was 0.6x at the end of the quarter, an improvement from 0.8x at the end of the first quarter.
Network margins improved sequentially by 150 basis points.
Truckload earnings improved nearly 60% sequentially and over 30% year-over-year.
Truckload operating income reached $40 million, a 31% increase year-over-year.
Truckload operating ratio was 93.6%, an improvement of 70 basis points compared to last year and approximately 230 basis points better than the first quarter.
Truckload revenue, excluding fuel surcharge, was $622 million in the second quarter, up 15% year-over-year.
Adjusted diluted EPS was $0.57 versus $0.89 last year.
AEC gross profit decreased from $24 million to $14 million, reflecting cumulative EAC adjustments.
Cash balance was $107 million with $355 million borrowing capacity under credit facility.
Consolidated adjusted EBITDA was $52 million versus $63 million last year; Machine Clothing adjusted EBITDA was $52 million versus $59 million last year; AEC adjusted EBITDA was $11 million versus $20 million last year.
Consolidated gross profit was $98 million or 31.3% of sales, down from $112 million or 33.9% last year.
Consolidated net sales were $311 million, down 6.2% from $332 million in the second quarter of last year.
Consolidated SG&A expenses increased to $59 million from $56 million due to currency effects and higher professional fees.
Effective tax rate was 31.3% versus 27.9% last year, due to prior year favorable discrete tax adjustments.
Engineered Composites (AEC) net sales were $130 million, lower by 5.7% versus the second quarter of 2024, impacted by cumulative catch-up adjustments but offset by growth in new programs.
Free cash flow was positive $18 million in Q2 versus negative $14 million in Q1; first half free cash flow was $4 million versus $46 million last year.
GAAP net income was $9.2 million versus $24.6 million last year; GAAP diluted EPS was $0.31 versus $0.39 last year.
Machine Clothing gross profit decreased from $89 million to $84 million, but gross margin improved by 40 basis points to 46.3%.
Machine Clothing net sales were $181 million, a decrease of 6.5% versus the second quarter of last year, adjusted decrease approximately 4% after strategic business exits.
Net R&D expenses increased to 4% of sales, reflecting emphasis on material science and new business ventures.
Dafinchi