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The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters, while missing in one.
Let’s see how things are shaping up for Alcoa this earnings season.
Alcoa’s fourth-quarter performance is likely to have been hurt by lower shipments in Alumina due to reduced production rates at the San Ciprián refinery in Spain to combat high natural gas prices and lower volumes in Aluminum due to reduced trade in Europe amid ongoing geopolitical tensions among other factors. The Zacks Consensus Estimate for sales in the fourth quarter indicates a 22.4% decline from the year-ago reported figure.
High energy costs, primarily in Europe due to war tensions and raw material cost inflation, are expected to have dented Alcoa’s bottom line in the fourth quarter.
The Bauxite segment’s performance is likely to have suffered due to lower shipments as a result of decreased demand in the Atlantic bauxite market and lower demand from some Alumina segment refineries, among other factors. The Zacks Consensus Estimate for the unit’s fourth-quarter sales (third-party sales + intersegment sales) hints at a 4.7% decrease from the year-ago reported number.
An anticipated reduction in shipments in the Alumina segment is expected to have weighed on total sales (third-party sales + intersegment sales). The consensus estimate for total Alumina sales in the fourth quarter suggests a 27.5% plunge from the year-ago reported number.
The Aluminum segment sales are likely to reflect the impact of lower shipments due to the partial curtailment of the Warrick smelter, among other factors and reduced trading activities. The Zacks Consensus Estimate for total sales from the segment shows a 24.5% drop from the fourth quarter of 2021 reported figure.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Alcoa this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Alcoa has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at a loss of 76 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alcoa currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
In the third quarter of 2022, Alcoa incurred a loss of 33 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. In the year-ago period, the company had reported earnings of $2.05 per share. Total revenues of $2.85 billion missed the Zacks Consensus Estimate by 4.33%. The top line declined 8.4% year over year.
Stocks to Consider
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat this season:
Caterpillar (CAT - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank #3. The company is scheduled to release fourth-quarter earnings numbers on Jan 31.
The Zacks Consensus Estimate for Caterpillar’s fourth-quarter earnings has been revised upward by 1% in the past 60 days. CAT pulled off a trailing four-quarter earnings surprise of 14.7%, on average.
IDEX Corporation (IEX - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #2. The company is slated to release fourth-quarter financial numbers on Jan 31.
The Zacks Consensus Estimate for IDEX’s fourth-quarter earnings has been revised upward by a penny in the past 60 days. IEX delivered a trailing four-quarter earnings surprise of 5.7%, on average.
Xylem (XYL - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2. The company is set to release fourth-quarter results on Feb 7.
The Zacks Consensus Estimate for Xylem’s fourth-quarter earnings has remained steady in the past 60 days. XYL pulled off a trailing four-quarter earnings surprise of 13.3%, on average.
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Will Alcoa (AA) Disappoint in Q4 Earnings on Lower Shipments?
Alcoa Corporation (AA - Free Report) is scheduled to release fourth-quarter 2022 results on Jan 18, after market close.
The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in three of the preceding four quarters, while missing in one.
Let’s see how things are shaping up for Alcoa this earnings season.
Alcoa Price and EPS Surprise
Alcoa price-eps-surprise | Alcoa Quote
Factors to Note
Alcoa’s fourth-quarter performance is likely to have been hurt by lower shipments in Alumina due to reduced production rates at the San Ciprián refinery in Spain to combat high natural gas prices and lower volumes in Aluminum due to reduced trade in Europe amid ongoing geopolitical tensions among other factors. The Zacks Consensus Estimate for sales in the fourth quarter indicates a 22.4% decline from the year-ago reported figure.
High energy costs, primarily in Europe due to war tensions and raw material cost inflation, are expected to have dented Alcoa’s bottom line in the fourth quarter.
The Bauxite segment’s performance is likely to have suffered due to lower shipments as a result of decreased demand in the Atlantic bauxite market and lower demand from some Alumina segment refineries, among other factors. The Zacks Consensus Estimate for the unit’s fourth-quarter sales (third-party sales + intersegment sales) hints at a 4.7% decrease from the year-ago reported number.
An anticipated reduction in shipments in the Alumina segment is expected to have weighed on total sales (third-party sales + intersegment sales). The consensus estimate for total Alumina sales in the fourth quarter suggests a 27.5% plunge from the year-ago reported number.
The Aluminum segment sales are likely to reflect the impact of lower shipments due to the partial curtailment of the Warrick smelter, among other factors and reduced trading activities. The Zacks Consensus Estimate for total sales from the segment shows a 24.5% drop from the fourth quarter of 2021 reported figure.
What Does the Zacks Model Say?
Our proven model does not conclusively predict an earnings beat for Alcoa this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates, which is not the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.
Earnings ESP: Alcoa has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate is pegged at a loss of 76 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alcoa currently carries a Zacks Rank #3.
Highlights of Q3 Earnings
In the third quarter of 2022, Alcoa incurred a loss of 33 cents per share, wider than the Zacks Consensus Estimate of a loss of 9 cents. In the year-ago period, the company had reported earnings of $2.05 per share. Total revenues of $2.85 billion missed the Zacks Consensus Estimate by 4.33%. The top line declined 8.4% year over year.
Stocks to Consider
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat this season:
Caterpillar (CAT - Free Report) has an Earnings ESP of +1.87% and a Zacks Rank #3. The company is scheduled to release fourth-quarter earnings numbers on Jan 31.
The Zacks Consensus Estimate for Caterpillar’s fourth-quarter earnings has been revised upward by 1% in the past 60 days. CAT pulled off a trailing four-quarter earnings surprise of 14.7%, on average.
IDEX Corporation (IEX - Free Report) has an Earnings ESP of +0.44% and a Zacks Rank #2. The company is slated to release fourth-quarter financial numbers on Jan 31.
The Zacks Consensus Estimate for IDEX’s fourth-quarter earnings has been revised upward by a penny in the past 60 days. IEX delivered a trailing four-quarter earnings surprise of 5.7%, on average.
Xylem (XYL - Free Report) has an Earnings ESP of +1.27% and a Zacks Rank #2. The company is set to release fourth-quarter results on Feb 7.
The Zacks Consensus Estimate for Xylem’s fourth-quarter earnings has remained steady in the past 60 days. XYL pulled off a trailing four-quarter earnings surprise of 13.3%, on average.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.