Alcoa Inc. (NYSE: AA), a company involved in the production and management of primary aluminum, fabricated aluminum, and alumina combined, is expected to release its fiscal second quarter earnings on Monday, July 11, 2011. In the last four quarters ending March, 2011, AA's reported earnings per share has surprised and exceeded analysts' consensus estimate by margins in the range of 3.70 percent to 80 percent.
For Q1 FY 2011:
- Revenue increased 22 percent to $6 billion, compared with revenue of $4.8 billion in the first quarter FY 2010, and 5 percent over revenue of $5.6 billion in the fourth quarter FY 2010.
- Income from continuing operations was $309 million, or $0.27 per share, compared to fourth quarter 2010 income from continuing operations of $258 million, or $0.24 per share, and a first quarter 2010 loss from continuing operations of $194 million, or $0.19 per share.
- Adjusted EBITDA of $955 million, up 22 percent from fourth quarter 2010, up 60 percent compared with first quarter 2010 and best since third quarter 2008.
- Adjusted EBITDA margin improved to 16.0 percent for the quarter, compared with 13.8 percent in fourth quarter 2010 and 12.2 percent in first quarter 2010.
The improvement over fourth quarter 2010 results was driven by higher realized prices for alumina and aluminum and growing demand for aluminum products in major end markets, along with productivity improvements.
For FY 2010
The company reported revenue of $21 billion, compared with $18.4 billion in 2009. Income from continuing operations was $262 million, or $0.25 per share, compared with a loss of $985 million, or $1.06 per share, in 2009. Full-year 2010 net income was $254 million, or $0.24 per share, compared with a net loss of $1.15 billion, or $1.23 per share, in 2009. Alcoa generated $1.2 billion in free cash flow in 2010, up $1.5 billion over 2009. The company's debt-to-capital ratio was reduced 390 basis points in 2010 compared with year-end 2009, driven by a $654 million net reduction in debt and a $1.6 billion increase in equity.
Company's Outlook
The company is expected to do well in the current quarter and beyond due to the world's growing population, increasing urbanization, and aluminum's advantages as a light, strong and recyclable material. The company said that it is well on track to meet its 2011 financial targets, with debt-to-capital ratio improving to 33.6 percent, 130 basis points better than fourth quarter 2010. Capital spending excluding the Ma'aden project was $204 million in the quarter, 14 percent of the 2011 target.
Analysts Forecast
For the second quarter FY 2011, analysts' EPS estimates range from a low of $0.28 per share to a high of $0.45 per share, compared with a consensus estimate of $0.13 per share to $0.35 per share in the year ago same quarter. For this quarter, analysts' revenue estimates range from a low of $5.75 billion to a high of $6.55 billion, compared with a consensus estimate of $5.19 billion to $6.32 billion in the same quarter a year ago. For the second quarter, the consensus EPS forecast has been decreased from $0.36 per share estimated 7 days ago to the current estimate of $0.35 per share.
Alcoa last traded at $15.23, down 0.05 points, or 0.33 percent, on Friday. During the quarter analysts at BMO Capital Markets downgraded the stock rating to Underperform from Market Perform.
