Earnings Sneak Peek: Alcoa (AA)

Alcoa Inc is one of the biggest names in the commodity world as it is the world’s third largest producer of aluminum. The company has also gained a fair amount of attention being that it is often synonymous with the start of earnings season. Each quarter Alcoa is one of the first major companies to report their earnings, and today marks the results from Q3 2012 [for more aluminum news and analysis subscribe to our free newsletter].

The company is involved in all facets of aluminum production, from mining to refining and selling the metal to companies around the world. AA operates in more than 12 countries worldwide and has quickly become a staple of the aluminum world. Currently, the stock trades around 19 million times per day and has a market cap of $9.7 billion. AA has a relatively low EPS of 0.07 and has yet to recover from the recession, as the industrial world overall has lagged.

Today’s earnings report will fall after the bell and will set the tone for Wednesday as well as for the rest of the week. Estimates for today’s EPS average out to 0.01 with the range falling between -0.1 and 0.11. Revenues are slated to come in at about $5.6 billion which represents a 13% dip in year over year performance. The stock has either met or surpassed expectations for the past three quarters, and many will look for it to continue that trend today [see also Marc Faber: Why Industrial Commodities Will Continue to Fail].

It should be noted that aluminum prices have performed quite well in the last quarter, with a jump of approximately 12%, most of that coming after the QE3 announcement. This will hopefully have a meaningful impact on bottom line returns for the company, and allow them to come away with a strong result. Either way, investors will want to keep a close eye on this stock throughout today’s trading as well as tomorrow, as AA will likely gap at Wednesday’s opening depending on the nature of the report.

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Disclosure: No positions at time of writing.

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