Alcoa To Report Q1 Results: Earnings Preview

(RTTNews) - Alcoa, Inc. (AA), the largest U.S. aluminum producer, is slated to report first-quarter results after the market closes on Monday. The results are likely to reflect the impact of lower metal prices, against the backdrop of excess supply from China, as well some as some restructuring charges in the light some recent acquisitions.

On average, 18 analysts polled by Thomson Reuters expect the company to have earned $0.26 per share on revenues of $5.94 billion. Analysts' estimates typically exclude special items.

Deutsche Bank Securities expects Alcoa to report adjusted earnings of $0.29 per share for the quarter. This expectation is after marking-to-market 15-day lagged LME aluminum price and premia for a realized price of $1.09 per pound.

In January, Deutsche Bank had reiterated the stock with a "Buy" rating and a price target of $20.

In the year-ago first-quarter, the company reported a net loss of $178 million or $0.16 per share. Excluding items, net income was $98 million or $0.09 per share. Revenue fell to $5.5 billion from $5.83 billion, as realized aluminum prices fell 8 percent year-over-year.

In the preceding fourth-quarter, the company reported net income of $159 million or $0.11 per share, compared to a net loss of $2.3 billion or $2.19 per share for the year-ago quarter. Sales climbed 14 percent to $6.38 billion.

Among the key events during its first-quarter, last month Alcoa agreed to acquire titanium supplier RTI International Metals, Inc. (RTI) for an enterprise value of $1.5 billion. Alcoa expects the acquisition to strengthen its aerospace business.

In the same month, Alcoa completed the acquisition of privately held TITAL, a Germany-based manufacturer of titanium and aluminum structural castings for aircraft engines and airframes. This acquisition also strengthens Alcoa's ability to capture growing demand for advanced aircraft engine components, in particular, those made of titanium.

Alcoa also said it would curtail the remaining 74,000 metric tons of smelting capacity at its São Luís (Alumar) facility in Brazil. The decision, to be completed by April 15, comes as the company evaluates upstream capacity for possible curtailment, closure or sale in order to optimize its commodity portfolio. The curtailment is expected to be complete by April 15, 2015.

Alcoa was among the companies that were hit most during the recession. The company cut more than 20,000 jobs and closed plants in the U.S. and Europe to tide over the global economic slowdown.

Like other aluminum producers, the company had been suffering from declining aluminum prices caused by a glut. Alcoa has taken steps to cut costs and re-align production in order to remain competitive.

Alcoa was replaced by Nike, Inc. (NKE) on the Dow Jones Industrial Average Index in 2013. However, it is still among the first major U.S. companies to report earnings for a new season and is considered a bellwether.

AA closed up 0.5 percent on Tuesday at $13.43. It has been trading in a range of $12.34 - $17.75 in the past 52-week period.