What's in the Offing for Alcoa (AA) This Earnings Season?
Alcoa Corporation AA is scheduled to release third-quarter 2023 results on Oct 18, after market close.
The company has a dull earnings surprise history, having outperformed the Zacks Consensus Estimate in only two of the preceding four quarters, while missing in the other two. The average miss was 192.1%.
Let’s see how things have shaped up for Alcoa this earnings season.
Alcoa Price and EPS Surprise
Alcoa price-eps-surprise | Alcoa Quote
Factors to Note
Alcoa’s third-quarter results are expected to be hurt by lower alumina production due to curtailment of production in the Kwinana refinery, reduced production in Australian refineries and unplanned equipment maintenance at the Alumar refinery. The Zacks Consensus Estimate for alumina production indicates a 1% dip from the year-ago reported number.
Despite an anticipated increase in shipments due to increased trading activity, lower production may weigh on Alumina segment’s third-party sales in the soon-to-be-reported quarter. The consensus mark for Alumina segment’s third-party sales implies an approximate 8% decline from the year-ago reported number.
The Aluminum segment is expected to put up a weak show on softer billet demand. The Zacks Consensus Estimate for third-party Aluminum segment sales suggests a 14.5% decline from the third-quarter 2022 reported figure.
However, raw material and production costs are likely to support AA’s bottom line in the to-be-reported quarter.
What Does the Zacks Model Say?
Our proven model does not conclusively predict 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 chances of beating estimates, which is not the case here, as elaborated below.
Earnings ESP: Alcoa has an Earnings ESP of 0.00% as both the Most Accurate Estimate and the Zacks Consensus Estimate are pegged at a loss of $1.13. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Alcoa currently carries a Zacks Rank #3.
Highlights of Q2 Earnings
In second-quarter 2023, Alcoa incurred an adjusted loss of 35 cents per share, narrower than the Zacks Consensus Estimate of a loss of 59 cents. The company’s revenues of $2.68 billion outperformed the Zacks Consensus Estimate by 2.16%. Both the top and bottom lines declined year over year.
Stocks to Consider
Here are some companies you may want to consider from the Zacks Industrial Products sector, as our model shows that these have the right combination of elements to post an earnings beat this season:
Stanley Black & Decker SWK has an Earnings ESP of +3.20% and a Zacks Rank #3. The company is scheduled to release third-quarter results on Oct 27. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stanley Black pulled off a trailing four-quarter earnings surprise of 47.2%, on average. The stock has gained 8.2% in a year.
Tenaris TS has an Earnings ESP of +3.32% and a Zacks Rank #3. The company is slated to release third-quarter results on Nov 1.
Tenaris delivered a trailing four-quarter earnings surprise of 7.7%, on average. The stock has rallied 20.5% in a year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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Alcoa (AA) : Free Stock Analysis Report
Stanley Black & Decker, Inc. (SWK) : Free Stock Analysis Report
Tenaris S.A. (TS) : Free Stock Analysis Report
