Tuesday, October 11, 2016
And They’re Off!
Alcoa (AA - Free Report) reported Q3 earnings before the bell today, in what has been traditionally known as the start of earnings season. The raw aluminum and specialty parts maker missed estimates on both top and bottom lines — 32 cents per share missed the 34 cents expected, on revenues of $5.21 billion which were lower that the Zacks Consensus Estimate of $5.33 billion.
The miss has sent AA shares down 3.5% in pre-market trading. Depending how analysts view the forthcoming split for Alcoa into its basic raw materials business and its aerospace/automotive parts manufacturing company, Arconic, we may see more slack in Alcoa’s trading price. The company has bid up more than 9% in the past month prior to this earnings and sales miss — the company’s first negative surprise since the September quarter last year.
Death of a Smartphone
Samsung’s Galaxy Note 7 has been permanently discontinued, following a problematic recall operation that replaced Note 7 phones with faulty batteries at risk of explosion… with new phones that have the same batteries. The lithium ion batteries in the phone tend to catch fire. Whoops!
Samsung shares — which trade on the South Korean stock market — fell 8% as a result. The company had become the main competitor of Apple’s (AAPL - Free Report) iPhone enterprise, but this failed launch of the new Note 7 has set the company back. Officially, Samsung is “temporarily adjusting” the troubled phone’s production schedule, but all indicators are the phone is finished.
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