Alcoa Inc. (NYSE: AA), the biggest US aluminum maker, is scheduled to release third quarter earnings after the closing bell on Thursday, October 7, 2010. Analysts, on average, expect the company to report earnings of 7 cents per share on revenue of $4.89 billion. In the year-ago quarter, the company reported earnings of 4 cents per share on revenue of $4.62 billion.
Alcoa Inc. engages in the production and management of primary aluminum, fabricated aluminum, and alumina worldwide. It involves in the technology, mining, refining, smelting, fabricating, and recycling of aluminum. The company is often seen as an economic bellwether because it serves a wide range of industries. Alcoa is the first component of the DJIA to post third-quarter results.
In the preceding second quarter, the Pittsburgh, Pennsylvania-based company's net income was $136 million, or 13 cents per share, compared to a loss of $454 million, or 47 cents per share, in the year-earlier quarter. Revenue rose to $5.19 billion from $4.24 billion in the same quarter last year. Analysts, on average, expected the company to report earnings of 12 cents on revenue of $5.05 billion for the quarter.
Alcoa boosted its industrywide forecast for 2010 global aluminum consumption growth from 10 percent to 12 percent at its last earnings call.
Alcoa has benefited from stronger volumes, productivity improvements, favorable currency and lower costs. The company implemented an aggressive cost-cutting program in response to economic downturn and maintained these reductions when markets began to recover.
On the downside, uncertainty about the pace of the U.S. economic recovery, slower growth in China, lower aluminum prices and rising input costs have continued to exert pressure on company's margin. Energy accounts for as much as a quarter of the production cost of aluminium. Meanwhile, aluminum prices have remained more or less lackluster amid concerns about oversupply in China.
In terms of stock performance, shares of the company have lost nearly 30 percent since the beginning of the year. So far this year, Alcoa is the worst performer in the Dow Jones Industrial Average.
Disclosure: Author doesn't own any of the stocks discussed here.
