Close-up of Arconic aero engine blades

Image source: Arconic.

What happened

Shares of value-added aluminum manufacturer Arconic (NYSE:ARNC) are up 10% as of 2:08 p.m. EST Wednesday following the release of its Tuesday earnings report.

So what

Analysts had been expecting the Alcoa spinoff to report $0.23 per share in pro forma profit on $3 billion in revenue in its fiscal fourth-quarter 2016 report last night. Management hit that revenue total on the head, reporting $3 billion in Q4 sales.

As for the profit, though, well, Arconic actually reported a $2.88-per-share loss for the quarter. Management blamed special items related to its just-sundered relationship with Alcoa for the entirety of that loss, however, and argued that "excluding special items, adjusted income from continuing operations" would have been "$0.12 per share."

Of course, even if you take those pro forma numbers at face value, they still suggest Arconic missed Wall Street estimates by nearly 50% -- but investors don't seem to mind, and are bidding up Arconic stock regardless.

Now what

Why might that be? You might think it was the guidance -- but you'd be wrong there as well.

In conjunction with its earnings (read "losses") announcement, Arconic issued new guidance for 2017 predicting it will take in between $11.8 billion and $12.4 billion in revenue and earn pro forma profits of between $1.10 and $1.20 per share. Problem is, these numbers also fall short of Wall Street expectations, which had been looking for revenue of $12.55 billion, and pro forma profits of $1.33 per share.

Long story short, aside from the uncertain prospect of a new CEO coming in and righting the ship (activist investor Elliott Management is pushing for a management overhaul), there's little reason for Arconic shares to be soaring as they are today. Now might be a good time for investors to take some profits off the table.

Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.