Alcoa Inc. (AA) will be reporting third quarter results on Tuesday night. Analysts have reduced estimates from 37 cents per share (July) to 23 cents per share. According to John Stephenson of First Asset Management Inc. in Canada, “It’s hard to be bullish on a company that provides a product that’s so linked to the broad global industrial economy.” That sums it up. Since aluminum and metals in general are used in production, if the economy declines, demand for finished goods, production and raw materials all decrease in response. The price of aluminum is down by 15% over the last few months. In addition, mining expenses have generally been going up over the last year. This is one of the reasons that profit estimates have dropped from 37 cents to 23 cents over the last quarter. However, the economic decline notwithstanding, it is estimated that this quarters’ earnings will more than double over last year’s earnings of 9 cents per share.
Two up and coming managers at Alcoa are: William F. Oplinger, Chief Financial Officer, Global Primary Products; and Matthias Obermeyer, V.P. of the Alcoa Program Office.
Also, the stock price has been going down over the last six months. Alcoa is a good company but we just have to wait until the economy turns around and then buy low and sell high. In the meantime, put it on your wish list.
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