Tennessee Operations is in the midst of another corporate split, but this time the name on the cold mill tower can stay as is.

Arconic’s facilities in Alcoa — part of the company’s Global Rolled Products operation that makes aluminum sheet for automotive and other industrial products — will continue to be named Arconic Corp.

The company’s Engineered Products and Forgings operation will split off and be named Howmet Aerospace Inc.

Tenn Ops has seen this before, but this time getting used to a new name will be avoided. It was less than three years ago, in November 2016, that ALCOA Inc. was split into Alcoa Corp. and Arconic.

Arconic calls this latest corporate division a “portfolio separation” on track for completion in the second quarter of 2020. Arconic announced the time frame with its second quarter 2019 results reported Aug. 2.

The report beat analysts’ forecasts and gave credence to the upbeat comments by Arconic Chairman and CEO John Plant.

“The Arconic team delivered improved quarterly revenue, adjusted operating income, adjusted operating income margin and adjusted earnings per share,” said Plant, the former TRW Automotive board chair and CEO who took the Arconic position early this year.

The numbers back up the words. Second-quarter revenue was $3.69 billion, up 3.4% over the quarter a year earlier. Earnings per share were 58 cents, up 52%.

The announcement gave The Motley Fool an opportunity to give credit to company leadership for defying the doubters, private equity buyers in particular. Those investors helped push Arconic’s share price down by more than 20% in January when the company’s board gave thumbs down to a buyout characterized as a “deal on the cheap.”

Instead of dealing, Arconic focused on a commitment to cost reduction, which it has increased to $140 million this year, and hired a new chief.

“Based on our first-half performance and our outlook for the remainder of 2019, we are increasing our full-year adjusted earnings per share,” Plant said.

Barron’s noted on Friday that Arconic’s share price rose nearly 8% last week during a tumultuous stock market. That came despite knowledge the company’s profits depend on airplane and auto parts, products that would be hit during a recession some analysts consider overdue. It happened while tariff wars are making investors jittery and Boeing is still in the throes of extricating itself from the 737 MAX fiasco.

It led Barron’s to write the headline Friday: “Arconic Looks to Unlock Value in a Potential Split. Alcoa May Get Left Behind.” That would be Alcoa Corp., the commodity-heavy side of the ALCOA Inc. split that investors had initially favored, and no longer Tennessee Operations’ corporate partner.

Bob has served in a variety of roles since joining The Daily Times in the 90s. He currently is editor of the business section. When someone gets promoted, retires or gets hired at a new job in Blount County, he's the man to email.

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