Alcoa Inc. (AA) Q2 Earning’s Expectations


Last week was an important week in the market as employment and unemployment numbers released showed significant improvement in the U.S Economy on the fact that unemployment levels slipped to 6.1%. This week, focus shifts to companies second quarter earnings especially Alcoa Inc. (NYSE:AA) with many analysts waiting to see whether earnings will build on the momentum set by the employment and unemployment numbers.

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Expectations are already high for the second quarter results not only for Alcoa, but other companies as well, according to Bloomberg’s Joe Ciolli.

“People are expecting big things and frankly if companies don’t match the expectations we could see a pull back from this record levels we have.” said Mr. Ciolli.

Alcoa Inc. (NYSE:AA)’s earnings could clearly highlight how people are feeling about the economy as well as what to expect from other companies.  Second quarter has not faced some of the challenges experienced in the first quarter such as poor weather conditions thus the reason Mr. Ciolli remains confident on companies reporting impressive results.

The market is slowly picking up as more people continue to make their entrance after a below par performance by many companies in the first quarter according to Mr. Ciolli. Warning signs could creep in according to the analyst if big companies report earnings that are below the much expected levels. Alcoa Inc. (NYSE:AA) is finally scheduled to report its earnings tomorrow after markets close with many analysts shifting their focus on the company’s outlook on global demand.

Analysts on average expect Alcoa Inc. (NYSE:AA) to report a drop in the quarter’s revenue by 3%, to about $5.64 billion. Earnings on the other hand are expected to be within analysts’ consensus forecasts of $0.12 per share which will be an improvement from $0.07 reported for the same period last year. Rising electricity costs continue to be a major headwind for the company at the back of EPA rules that require fewer coal-powered electricity plants.

Higher fuel costs are already prompting many automakers to replace steel with aluminum something that is slowly driving its prices higher compared to the previous quarters. Decreasing stock levels is already pushing prices higher something that looks to benefit Alcoa Inc. (NYSE:AA) a great deal going forward.

Disclosure: none