Alcoa Corporation (AA) reported a 3% year-over-year increase in its cost of goods sold for Q1 2026, while selling, general, and administrative expenses rose approximately 16.9%. The company’s energy costs, which accounted for 24% of alumina refining and primary aluminum production costs in 2025, are expected to lead to approximately $15 million in additional expenses in Q2 2026 due to higher diesel prices related to the Middle East conflict.
In the first quarter of 2026, Alcoa also faced raw material cost pressures, consuming 2.2-4.0 metric tons of bauxite and 80-130 kilograms of caustic soda for each metric ton of alumina produced. The company is currently in the process of restarting operations at the San Ciprián smelter, with expenses from this restart classified as special items for the quarter.
Despite the challenges, Alcoa is focused on operational efficiency and renewable energy use. The stock has increased 3.5% over the past three months, which lags behind the industry’s 4.6% growth, while the Zacks Consensus Estimate for 2026 earnings has surged 35.2% in the last 60 days. Alcoa holds a Zacks Rank of #3 (Hold).
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