Alcoa Fourth Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Alcoa (NYSE:AA) will unveil its latest earnings on Tuesday, January 8, 2013. Alcoa is a global producer of aluminum. It is mainly engaged in the production and management of primary aluminum, fabricated aluminum, and alumina combined. It is actively involved in a range of industries, including technology, mining, smelting, and recycling.

Alcoa Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for net income of 7 cents per share, up from net loss of 3 cents in the year-earlier quarter. During the past three months, the average estimate has moved down from 9 cents. Between one and three months ago, the average estimate moved down. It also has dropped from 8 cents during the last month. Analysts are projecting profit to rise by 65.3% compared to last year’s 25 cents.

Past Earnings Performance: The company topped forecasts last quarter after being in line with estimates the quarter prior. In the third quarter, it reported profit of 3 cents per share versus a mean estimate of 0 cents. Two quarters ago, it reported net income of 6 cents per share.

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A Look Back: In the third quarter, the company swung to a loss of $143 million (13 cents a share) from a profit of $172 million (15 cents) a year earlier, but beat analyst expectations. Revenue fell 9.1% to $5.83 billion from $6.42 billion.

Wall St. Revenue Expectations: Analysts predict a decline of 5.8% in revenue from the year-earlier quarter to $5.64 billion.

Analyst Ratings: With four analysts rating the stock as a buy, three rating it as a sell and seven rating it as a hold, there are indications of a bullish outlook.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of two-straight quarters of revenue declines. Revenue fell 9.4% in the second quarter and dropped again in the third quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.19 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.26 in the second quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 6.2% to $6.53 billion while assets rose 0.1% to $7.78 billion.

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Here’s how Alcoa traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

Screen Shot 2013-01-07 at 10.04.22 AM

(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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