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What's in the Offing for Alcoa (AA) This Earnings Season?
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Alcoa Corporation (AA - Free Report) is likely to register a decrease in the top line from last year’s quarterly reading when it reports fourth-quarter 2023 earnings on Jan 17, after market close. The Zacks Consensus Estimate for revenues is pegged at $2,613 million, reflecting a decline of 1.9% from the prior year’s quarterly reported figure.
The bottom line of this leading producer of bauxite, alumina and aluminum products is expected to decline from the earlier year’s quarterly figure. Over the past 30 days, the consensus estimate for earnings per share in the fourth quarter has decreased 7.6% to a loss of 99 cents, suggesting a decline of 41.4% from last year’s quarterly level.
The company has a trailing four-quarter negative earnings surprise of 75.6%, on average.
Key Factors to Note
Lower aluminum prices and unfavorable energy impact owing to CO2 compensation changes in Norway are expected to have hurt Alcoa’s Aluminum segment in the fourth quarter. Lower average realized price and lower regional premiums are likely to have weighed on the Aluminum segment’s third-party sales in the quarter.
For the fourth quarter, the Zacks Consensus Estimate for the Aluminum segment’s third-party sales is $1,680 million, implying an 8.3% decline from the year-ago reported number. The consensus mark for the Aluminum segment’s total sales indicates a 9.5% dip from the year-ago reported number.
Given the company’s extensive geographic presence, its operations are subject to global political risks and foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Alcoa's overseas business in the to-be-reported quarter.
However, Alcoa’s Alumina segment has been reaping the benefits from higher shipments of alumina, primarily driven by increasing trading activity and shipments across the refineries. The consensus mark for the Alumina segment’s third-party sales implies a 9.8% increase from the year-ago reported number.
Also, lower raw materials and decreasing production costs across both segments are likely to have supported the company’s performance in the to-be-reported quarter.
Our proven model predicts 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 odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Alcoa has an Earnings ESP of +5.87% as the Most Accurate Estimate is pegged at a loss of 94 cents, which is lower than the Zacks Consensus Estimate of a loss of 99 cents per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alcoa presently carries a Zacks Rank of 3.
Highlights of Q3 Earnings
In third-quarter 2023, Alcoa incurred an adjusted loss of $1.14 per share, broader than the Zacks Consensus Estimate of a loss of $1.13 per share. However, the company’s revenues of $2.6 billion outperformed the Zacks Consensus Estimate by 0.4%. Both the top and bottom lines declined year over year.
Other Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
The company is scheduled to release fourth-quarter 2023 results on Jan 29. Graco’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one, the average beat being 7.2%.
Ingersoll Rand Inc. (IR - Free Report) has an Earnings ESP of +1.64% and a Zacks Rank of 3. The company is slated to release fourth-quarter 2023 results on Feb 15.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 16.1%.
IDEX Corporation (IEX - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank of 3. The company is slated to release fourth-quarter 2023 results on Feb 6.
IDEX’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.9%.
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What's in the Offing for Alcoa (AA) This Earnings Season?
Alcoa Corporation (AA - Free Report) is likely to register a decrease in the top line from last year’s quarterly reading when it reports fourth-quarter 2023 earnings on Jan 17, after market close. The Zacks Consensus Estimate for revenues is pegged at $2,613 million, reflecting a decline of 1.9% from the prior year’s quarterly reported figure.
The bottom line of this leading producer of bauxite, alumina and aluminum products is expected to decline from the earlier year’s quarterly figure. Over the past 30 days, the consensus estimate for earnings per share in the fourth quarter has decreased 7.6% to a loss of 99 cents, suggesting a decline of 41.4% from last year’s quarterly level.
The company has a trailing four-quarter negative earnings surprise of 75.6%, on average.
Key Factors to Note
Lower aluminum prices and unfavorable energy impact owing to CO2 compensation changes in Norway are expected to have hurt Alcoa’s Aluminum segment in the fourth quarter. Lower average realized price and lower regional premiums are likely to have weighed on the Aluminum segment’s third-party sales in the quarter.
For the fourth quarter, the Zacks Consensus Estimate for the Aluminum segment’s third-party sales is $1,680 million, implying an 8.3% decline from the year-ago reported number. The consensus mark for the Aluminum segment’s total sales indicates a 9.5% dip from the year-ago reported number.
Given the company’s extensive geographic presence, its operations are subject to global political risks and foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Alcoa's overseas business in the to-be-reported quarter.
However, Alcoa’s Alumina segment has been reaping the benefits from higher shipments of alumina, primarily driven by increasing trading activity and shipments across the refineries. The consensus mark for the Alumina segment’s third-party sales implies a 9.8% increase from the year-ago reported number.
Also, lower raw materials and decreasing production costs across both segments are likely to have supported the company’s performance in the to-be-reported quarter.
Alcoa Price and Consensus
Alcoa price-consensus-chart | Alcoa Quote
Earnings Whispers
Our proven model predicts 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 odds of an earnings beat, which is the case here, as elaborated below.
Earnings ESP: Alcoa has an Earnings ESP of +5.87% as the Most Accurate Estimate is pegged at a loss of 94 cents, which is lower than the Zacks Consensus Estimate of a loss of 99 cents per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alcoa presently carries a Zacks Rank of 3.
Highlights of Q3 Earnings
In third-quarter 2023, Alcoa incurred an adjusted loss of $1.14 per share, broader than the Zacks Consensus Estimate of a loss of $1.13 per share. However, the company’s revenues of $2.6 billion outperformed the Zacks Consensus Estimate by 0.4%. Both the top and bottom lines declined year over year.
Other Stocks to Consider
Here are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.
Graco Inc. (GGG - Free Report) has an Earnings ESP of +4.87% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company is scheduled to release fourth-quarter 2023 results on Jan 29. Graco’s earnings have surpassed the Zacks Consensus Estimate in three of the preceding four quarters while missing in one, the average beat being 7.2%.
Ingersoll Rand Inc. (IR - Free Report) has an Earnings ESP of +1.64% and a Zacks Rank of 3. The company is slated to release fourth-quarter 2023 results on Feb 15.
Ingersoll Rand’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 16.1%.
IDEX Corporation (IEX - Free Report) has an Earnings ESP of +1.03% and a Zacks Rank of 3. The company is slated to release fourth-quarter 2023 results on Feb 6.
IDEX’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 4.9%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.