Arconic has restarted operations at its New York facility and will end the suspension on production at its Tennessee facility later this week, the company announced on Monday.
Arconic, which began operations as a standalone entity after its separation from Howmet in early April, had shut down both the facilities temporarily amid weak demand and in response to contain COVID-19’s spread.
On Monday, Tim Myers, Arconic’s chief executive officer, said the company’s China facilities resumed normal operations in April after being under lockdown in early 2020, and that strong market demand had enabled its packaging facility in Russia to operate at full capacity amid the pandemic.
Automotive Aerospace impact Q1 earnings
The company also announced its results for the first quarter and noted its financial position remained strong, despite pandemic-related shutdowns. Myers said the company benefited from its variable cost structure and that it was pivoting its strategy in response to anticipated lower demand in the automotive and aerospace sectors over the next few quarters. The company, Myers said, was undertaking cost-saving measures that would improve its finances by $200mn.
The company reported that its Q1 2020 financials were based on the Q1 earnings reported by Howmet before the separation of the two companies. Arconic’s global rolled products sales fell to around $1.5bn during the quarter from $1.7bn during the same period in 2019 because of disruptions in the automotive and commercial aerospace industries—two of its main customers. The company’s revenue also fell by 12pc in Q1 2020 to $1.6bn compared to the same 2019 quarter due to this reason.
However its operating profit increased by 26pc to $170mn in Q1 2020, compared to the same quarter last year, because of cost reductions and favorable aluminum prices, the company reported.