Global Slowdown may Hurt Alcoa Earnings

Alcoa Inc (NYSE:AA) reports fourth quarter earnings after the markets close today. Analysts expect better sales than the period a year ago, but significantly lower earnings per share due to softening demand for aluminum. Demand has dropped during the global slowdown, particularly in Europe and China. Aluminum prices were down 12 percent in the fourth quarter compared to the immediately preceding quarter.

According to analysts surveyed by FactSet, earnings per share is expected to be 1 cent per share on sales revenue of $5.78 billion, versus 28 cents a share in the September quarter on sales of $6.3 billion. In the same quarter last year, Alcoa reported earnings of 24 cents per share on $5.65 billion.

The company recently announced it proposed to cut its worldwide smelting capacity by 12 per cent by closing or reducing output at some smelters. Alcoa’s stock fell almost 10 percent in the last quarter and was down 44 percent for the year. Today’s earnings will offer insight into whether the global slowdown will continue to hurt Alcoa shareholders.

Here’s how Alcoa’s stock is trading ahead of earnings:

Alcoa, Inc. (NYSE:AA): AA shares recently traded at $9.37, up $0.21, or 2.29%. They have traded in a 52-week range of $8.45 to $18.47. Volume today was 9,755,605 shares versus a 3-month average volume of 33,302,200 shares. The company’s trailing P/E is 9.83, while trailing earnings are $0.95 per share.

To contact the reporter on this story: Damien Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com