“Aerospace component manufacturer Arconic took a lot of heat in January when its board nixed a potential sale of the company, with shares falling more than 20% on the announcement,” according to the Motley Fool.

A week after the Wall Street Journal reported that Arconic was nearing a deal to be acquired by Apollo Global Management for more than $10 billion, the aerospace fastener and components manufacturer ended talks with the buyer.

“We did not receive a proposal for a full-company transaction that we believe would be in the best interests of Arconic’s shareholders and other stakeholders,” stated company chairman John C. Plant.

Arconic, which includes Alcoa’s former $1.8 billion Fastening Systems and Rings business, had been mulling possible takeovers since last summer when three companies expressed interest.

In the months following the deal’s demise, however, Arconic and its new leadership team, including former TRW Automotive CEO Plant, have “taken decisive steps to bring down costs and improve operations, which has led to improved quarterly results and a recovering stock that today trades above the rumored buyout price.”

Arconic reported second-quarter Engineered Products and Solutions (EP&S) revenue, including fasteners, increased 6% to $1.6 billion, which included 8% organic sales growth “driven by aerospace engine and defense growth.”

Segment operating profit rose 28% to $286 million, driven by “net cost reductions, favorable pricing, and volume increases, partially offset by mix.” Segment operating margin climbed 310 basis points to 18.3%.

During the first six months of 2019, EP&S revenue grew 5.8% to $3.07 billion, while operating profit improved 25% to $539 million and margins increased to 18.3%.

Arconic said it remains on track to separate its portfolio businesses by the fourth quarter of 2019. EP&S (engine components, fastening systems, and engineered structures) and forged aluminum wheels will be named Howmet Aerospace. Global Rolled Products and Construction Systems will operate in a company that retains the Arconic name. 

The company  anticipates total separation costs of between $130 million and $160 million, plus upwards of $35 million in one-time capital spending costs. Arconic hopes to raise upwards of $200 million via divestitures to offset the one-time costs associated with the separation.

“Arconic’s biggest problem in recent years has been credibility,” according to the Motley Fool. “With Plant and his team making steady progress delivering on the promises they’ve made, investors are finally beginning to realize Arconic’s full potential.” Web: Arconic.com