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Alcoa (NYSE:AA) cut the tape on a new earnings season today with better-than-expected EPS and revenue for its fourth quarter.

Now, we could debate whether or not AA is a good bellwether all day long, but it is, nonetheless, nice to see this aluminum giant with a rather positive report to begin an earnings season that many are excited about.

Excluding items, Alcoa earned 21 cents per share in the fourth quarter, which soared above last year's penny profit. The result also beat the Zacks Consensus Estimate of 19 cents; it's third consecutive quarter with a positive EPS surprise. The company attributed the improved earnings to higher pricing, continued strengthening in most end markets and improved productivity thanks to its Cash Sustainability Program.

Revenue of $5.7 billion inched past the Zacks Consensus Estimate at $5.62 billion, which might be problem for some analysts as they take a closer look. AA enjoyed improved pricing for alumina and aluminum, along with continued strength in most end markets. It also set an all-time record for cash from operations and a fourth-quarter record for free cash flow.

Looking forward, Alcoa expects demand for aluminum to grow another 12% this year. Furthermore, the company expects global demand for aluminum to double by 2020.

This encouragement for the future can be seen in earnings estimates for 2011. While expectations for 2010 had been spotty at best, there's been a steady move higher for the current year. The Zacks Consensus Estimate for this year is now $1.11 per share, which is up 11% in 3 months and 5.7% in 2 months.

More recently, there have been 5 upward revisions for 2011 in the past 30 days out of 15 total estimates. So the outlook is up 3.7% in the past month.

Despite all this, the company remains a shorter-term Zacks #3 Rank ('hold'), but all bets will be off in the coming days as analysts take the new quarter's results into account. Likewise for our long-term "Neutral" recommendation.

AA placed the bar for this report a bit higher last week when it announced plans to restart 3 aluminum smelters in the first half of 2011 that had been idled during the recession. It was considered a very bullish move. It will be interesting to see if analysts consider that bar to have been cleared.

We'll have more on AA's fourth quarter report coming soon...

Source: Alcoa Leads Off With a Beat