With Alcoa (AA) kicking off earnings season this week, investors will be keeping a close eye on the results of their favorite commodity stocks. On Tuesday, the largest U.S. aluminum producer reported a profit of $24 million in the third quarter – a significant uptick from the $143 million loss reported a year ago. Revenues for the company came in at $5.765 billion, beating analyst estimates of $5.66 billion; Alcoa’s Q3 EPS of $0.11 also beat estimates by $0.06. In the coming week, investors will once again comb through a slew of earnings reports, but what is perhaps more important than the reports themselves is the particular outlook that each company provides [for more commodity news and analysis subscribe to our free newsletter].
Below, we outline some of the biggest commodity producers and what you should be looking for in their reports:
- El Paso Pipeline Partners (EPB): This MLP, like so many others, calls Houston home. The company currently operates approximately 13,000 miles of pipeline as well as a number of storage facilities for LNG. The company will report earnings on Wednesday and analysts will be looking for EPS of $0.47 for the third quarter with revenues around $384.8 million. Note that EPB missed its earnings mark last quarter, coming in at $0.40 per share versus the consensus estimate of $0.48.
- Kinder Morgan Inc (KMI): On Wednesday, Kinder Morgan will detail the results from its most recent quarter. The oil & gas parent firm operates in six different segments and has over 75,000 miles of total pipeline capacity. Analysts are expecting an EPS of $0.33 with revenues at $3.74 billion. KMI has missed its last three earnings marks, though revenues have exceeded estimates for the past four quarters.
- Nucor Corp (NUE): This steelmaker has a market cap of over $15 billion and a handsome dividend yield of 3.0%. The stock will report prior to market open on Thursday and should be active throughout the session. Analysts expect the company to report earnings of $0.38 and revenues of $4.77 billion. In the second quarter, Nucor missed its earnings mark, though revenues beat expectations.
- Peabody Energy Corp (BTU): Based in St. Louis, this coal miner has 28 operations throughout the U.S. and Australia, and it will report its third quarter results on Thursday. Forecasts have BTU showing EPS of -$0.03 and revenues of $1.79 billion. In the last quarter, however, analysts estimates were also negative for the company’s EPS, but Peabody managed to beat expectations, posting earnings of $0.33 per share.
- Schlumberger Ltd. (SLB): The biggest firm on the list, Schlumberger is well-known for its drilling and oil production as well as having a major presence in the fracking world. Schlumberger will release its earnings statement prior to market open Friday; analysts are expecting earnings to come in at $1.24 per share for the third quarter, while revenues are expected come in at $11.6 billion. Both figures are slightly higher than the previous quarter’s recordings.
The Bottom Line
As always, we remind investors that earnings reports have two key elements to watch out for: the actual numbers and the guidance. A company can surpass analysts’ expectations, but a cloudy forecast for the future could send the stock tumbling. Likewise, a miss on the numbers can often be overshadowed by a strong outlook. Be sure to pay attention to both aspects of each report in order to properly trade the stock.
Disclosure: No positions at time of writing.