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Alcoa: Could There Be a Surprise in Its Q4 Earnings?

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Jan. 14 2019, Updated 8:15 a.m. ET

Alcoa

Alcoa (AA), the leading US-based aluminum producer (XME), is scheduled to release its fourth-quarter earnings on January 16 after the markets close. Overall, 2018 was a terrible year for metal and mining companies. Alcoa wasn’t an exception. As aluminum prices fell amid concerns about China’s slowdown, aluminum producers, including Alcoa and Century Aluminum (CENX), also fell sharply.

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Aluminum prices

Aluminum prices were volatile last year. In April, prices rose to multiyear highs following the RUSAL sanctions. However, we saw a sharp sell-off in aluminum after the sanctions were relaxed. The RUSAL sanctions could be waived after the company restructured its board towards the end of 2018. Alumina held the baton for volatility last year. Alumina saw several wide price swings. From the RUSAL sanctions to the curtailment of Norsk Hydro’s Alunorte refinery, a series of disruptions hit alumina markets (AWC) (S32).

Fourth-quarter earnings

While 2018 was a somber year for Alcoa, the company managed to generate a surprise in its third-quarter earnings. Alcoa posted better-than-expected earnings and announced a $200 million share buyback during its earnings release. The move led to a sharp rally in Alcoa’s stock after its third-quarter earnings release. However, we saw weakness in Alcoa in the fourth quarter amid the broader market sell-off.

In this series, we’ll see what analysts expect from Alcoa’s fourth-quarter earnings. We’ll also discuss how analysts view Alcoa ahead of its fourth-quarter earnings release.

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