Must Know: Does Alcoa Look Set for a Solid 2017?




Alcoa (AA) closed at $36.86 on February 3, 2017, falling 2.2% from its previous day’s close. Alcoa had an eventful 2016. The company, which traces its roots back to 1888, has been a pioneer in aluminum production technology. Aluminum production has been Alcoa’s primary business for years.

On November 1, 2016, Alcoa split into two entities—Alcoa and Arconic (ARNC). Alcoa now houses the Legacy Upstream business and competes with other primary producers like Rio Tinto (RIO).

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4Q16 earnings

Alcoa (AA) released its 4Q16 financial results on January 24, 2017. AA reported a net loss of $125 million in 4Q16, which translates into a loss of $0.68 per share. However, the net loss is mainly due to one-time losses associated with Alcoa’s curtailment of the Suriname refinery and impairment of the company’s interest in a Western Australia gas field.

After adjusting for special items of $151 million, Alcoa reported its adjusted net income of $26 million in 4Q16, which translates into EPS (earnings per share) of $0.14. You can read more about Alcoa’s 4Q16 earnings in Alcoa Investors Continue to Party despite 4Q16 Earnings Miss.

Looking at other aluminum producers (XME), Norsk Hydro (NHYDY) is scheduled to release its 4Q16 earnings on February 9, 2017, while Century Aluminum’s (CENX) 4Q16 financial results are expected on February 23.

Series overview

In this series, we’ll look at what’s next for Alcoa following its 4Q16 earnings release. We’ll analyze the 2017 guidance provided by Alcoa’s management, as well as how the company’s performance could shape up in 2017.

Let’s begin by analyzing how Wall Street analysts changed their ratings and target prices for Alcoa after its 4Q16 earnings release.


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