Alcoa soared in Friday morning trade after reporting good third-quarter earnings and launching a dividend program for the first time as a newly formed corporation.

Earnings of $1.76 per share, or $2.05 on an adjusted basis, marked a sequential improvement and a turnaround from a loss in Q32020. Its revenue gain was fueled by a 13 % increase in the average realized third-party price of primary aluminum over the previous month, another sign of commodity price inflation.

Alcoa generated $352 million in cash flow in the quarter, and the company touted its stronger balance sheet, which includes no debt maturities until 2027.Alcoa reports better-than-expected profit, see shipments rising - MINING.COM

"The strategic work we've been undertaking across our Company has allowed us successfully exploit the benefits from very strong market fundamentals and deliver another fantastic quarter with record profitability," Alcoa CEO and President Roy Harvey stated. Alcoa is stronger and better positioned for the future today, and we want to maintain our positive momentum and deliver value consistently throughout the commodity cycle."

It's possible that the corporation implemented a dividend and buyback program with this in mind. While the quarterly dividend begins at $.01 per share, or a.7% annual return at the post-earnings share price, the $500 million share repurchase might be more substantial, as it would cover around 4.75 % of the outstanding shares if accomplished at the current price.

Investors may be more interested in the company's comments: "We believe these plans can be sustained across the commodity cycle, based on our view of markets and forecast cash flows," Harvey added.

"The share repurchase program will be financed by operational cash flows and cash on hand," said CFO William Oplinger, "as the balance sheet has continued to strengthen, with proportional adjusted net debt at its lowest level since our Company's creation in 2016."

Constellium Nv is up 2.4 %, Kaiser Aluminum Corporation is up 2.75 %, and Arconic is up 2.5 % on the news.