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Alcoa Inc. (AA) is scheduled to report its first-quarter 2012 results after the market closes on Tuesday, April 10. The Zacks Consensus Estimate for the quarter is a loss of 4 cents per share, representing a significant year over year decrease of 112.5%.

With respect to earnings surprises, the company missed the Zacks Consensus Estimate in three of the trailing four quarters while exceeding in one of the quarters. This is reflected in the average earnings surprise of -109.64%.

Fourth-Quarter and Full Year 2011 Synopsis

Excluding restructuring charge of $159 million and other items, Alcoa's loss came in at 3 cents per share in the fourth quarter of 2011, below the Zacks Consensus Estimate of a profit of 1 cent. It is the company's first loss in the last nine quarters. The disappointing results were driven by higher costs of energy and transportation. For full-year 2011, Alcoa reported income from continuing operations of $614 million, or 55 cents per share, more than double of 2010 results.

Despite a 6% year over year rise in revenues to $6 billion, business was down in most industries including construction, industrial products, packaging and commercial transportation. For 2011, revenues increased 19% to $25 billion from $21 billion in 2010.

Company's Outlook

For 2012, Alcoa expects global aluminum demand to grow 7% due to global deficit in primary aluminum supply. The company expects global aluminum demand to double by 2020 compared with 2010.

Agreement of Estimate Revisions

In the past 30 days, two analysts made downward revisions while one analyst made upward revision for the first quarter of 2012. In the last seven days, none of the analysts made any downward revision but only one analyst made an upward revision of estimate.

Magnitude of Estimate Revisions

In the last 30 days, the Zacks Consensus Estimate for the quarter has decreased to a loss of 4 cents per share from a loss of 3 cents prior to that. Over the last 90 days, the Zacks Consensus Estimate for the quarter plunged to a loss of 4 cents per share from a profit of 13 cents prior to that.

Our Viewpoint

We believe that the company's outlook depends on the uncertainties in the aluminum market. We are concerned about volatile prices of aluminum and rising raw material costs.

Alcoa also faces stiff competition from Aluminum Corporation of China Limited (ACH), Rio Tinto plc. (RIO) and BHP Billiton Ltd. (BHP). In view of the above stated reasons, the company retains a Zacks #3 Rank, indicating a short-term (1 to 3 months) "Hold" rating and we have a long-term (more than 6 months) "Neutral" recommendation on the stock.

Alcoa Inc.(AA) is scheduled to report its first-quarter 2012 results after the market closes on Tuesday, April 10. The Zacks Consensus Estimate for the quarter is a loss of 4 cents per share, representing a significant year over year decrease of 112.5%.

With respect to earnings surprises, the company missed the Zacks Consensus Estimate in three of the trailing four quarters while exceeding in one of the quarters. This is reflected in the average earnings surprise of -109.64%.

Fourth-Quarter and Full Year 2011 Synopsis

Excluding restructuring charge of $159 million and other items, Alcoa's loss came in at 3 cents per share in the fourth quarter of 2011, below the Zacks Consensus Estimate of a profit of 1 cent. It is the company's first loss in the last nine quarters. The disappointing results were driven by higher costs of energy and transportation. For full-year 2011, Alcoa reported income from continuing operations of $614 million, or 55 cents per share, more than double of 2010 results.

Despite a 6% year over year rise in revenues to $6 billion, business was down in most industries including construction, industrial products, packaging and commercial transportation. For 2011, revenues increased 19% to $25 billion from $21 billion in 2010.

Company's Outlook

For 2012, Alcoa expects global aluminum demand to grow 7% due to global deficit in primary aluminum supply. The company expects global aluminum demand to double by 2020 compared with 2010.

Agreement of Estimate Revisions

In the past 30 days, two analysts made downward revisions while one analyst made upward revision for the first quarter of 2012. In the last seven days, none of the analysts made any downward revision but only one analyst made an upward revision of estimate.

Magnitude of Estimate Revisions

In the last 30 days, the Zacks Consensus Estimate for the quarter has decreased to a loss of 4 cents per share from a loss of 3 cents prior to that. Over the last 90 days, the Zacks Consensus Estimate for the quarter plunged to a loss of 4 cents per share from a profit of 13 cents prior to that.

Our Viewpoint

We believe that the company's outlook depends on the uncertainties in the aluminum market. We are concerned about volatile prices of aluminum and rising raw material costs.

Alcoa also faces stiff competition from Aluminum Corporation of China Limited (ACH), Rio Tinto plc. (RIO) and BHP Billiton Ltd. (BHP). In view of the above stated reasons, the company retains a Zacks #3 Rank, indicating a short-term (1 to 3 months) Hold rating and we have a long-term (more than 6 months) Neutral recommendation on the stock.

ALCOA INC (AA): Free Stock Analysis Report

ALUMINUM CP-ADR (ACH): Free Stock Analysis Report

BHP BILLITN LTD (BHP): Free Stock Analysis Report

Source: Alcoa: Earnings Preview