18 Apr

Key Takeaways from Alcoa’s Q1 Earnings

WRITTEN BY Mohit Oberoi, CFA

Alcoa’s first-quarter earnings

Alcoa (AA) released its first-quarter earnings after the markets closed on April 17. The company reported revenues of $2.72 billion in the first quarter. The analysts polled by Thomson Reuters expected Alcoa to post revenues of $2.80 billion. The company posted revenues of $3.3 billion in the fourth quarter and $3.1 billion in the first quarter of 2018.

Key Takeaways from Alcoa’s Q1 Earnings

Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.

Alcoa posted an adjusted EPS of -$0.23 in the first quarter. The company posted an EPS of $0.70 in the fourth quarter and $1.01 in the first quarter of 2018. The company also missed the consensus EPS estimates. Alcoa was trading lower in after-hours trading on April 17. The stock’s returns have trailed the SPDR S&P Metals and Mining ETF (XME) in 2019.

Other takeaways

Alcoa also lowered its 2019 aluminum demand growth forecast to 2%–3%. Previously, the company expected the global aluminum demand to grow between 3%–4% in 2019. Alcoa also lowered its forecast for the aluminum market deficit to 1.5 million metric tons–1.9 million metric tons. Previously, the company expected the deficit to be 1.7 million metric tons–2.1 million metric tons. In the commodity markets, a deficit means that demand is outstripping supply.

Since aluminum was also in a supply deficit last year, global aluminum inventories have come down. Alcoa sees falling aluminum inventories as a bullish driver for aluminum prices. Despite falling inventories and the supply deficit, aluminum has underperformed other base metals in 2019. During the first-quarter earnings call, Alcoa noted that China’s transportation, packaging, and electrical industries are witnessing a slowdown. Apparently, these three industries were among the biggest aluminum end users. So, a demand slowdown from these sectors is taking a toll on Chinese aluminum demand.

Latest articles

19 Jul

Barrick Gold Reaches Deal to Buy Acacia Mining

WRITTEN BY Anuradha Garg

After a long standoff, Barrick Gold (GOLD) and Acacia Mining (ABGLF) have reached an agreement.

19 Jul

Comcast Shares Pop on Goldman's Optimism

WRITTEN BY Ruchi Gupta

Comcast (CMCSA) shares popped after Goldman Sachs issued a positive note on the company recently. Goldman upgraded its rating for Comcast to "buy" from "hold."

19 Jul

Why Analysts Are Bearish on Netflix Stock

WRITTEN BY Aditya Raghunath

Netflix stock fell over 10.0% on Thursday and is down 0.5% today as well.

On Thursday, pet retailer Chewy (CHWY) reported its first-quarter results after the market closed. The company reported its earnings for the first time.

Kenya’s Safaricom and South Africa’s Vodacom want to team up to purchase M-Pesa rights from Vodafone (VOD).

Cleveland-Cliffs (CLF) released its second-quarter results today before the markets opened.