This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Alcoa Expected to Fall Short in 2Q13, Says Citi and Goldman

Stocks in this article: AA

NEW YORK ( TheStreet) - With second-quarter reports to be released after market closing Monday, analysts expect lower than estimated earnings for Alcoa (AA ) in the future.

The aluminum producer's shares rose 1% in midday trading Monday to $7.89, closing in on Goldman Sach's 6-month price target of $8.

Analysts from multiple firms have lowered their expectations for the company as the price of aluminum settled at $0.84 per pound. "We are shaving our 2Q estimate to $0.07 per share vs consensus of $0.09 per share based on lower than expected LME spot pricing with some offsets from a stronger USD," wrote Citi analysts in a July 2nd report. Goldman Sachs had had previously estimated LME aluminum prices to be $0.91 per pound.

In its first-quarter, Alcoa reported an after tax income of $351 million. However, Citi bank expects operating income for the company to fall as low as $304 million this quarter. Citi sees revenue from engineered products dropping 10% to $169 million, and losing 2% of income from rolled products or $95 million in the third quarter. " Third quarter is typically a sequentially lower volume quarter, driven by Europe," Citi analysts explained in the report.

Despite retaining a "neutral" rating, Goldman Sachs analysts warranted cautioun. " W e see some near-term risk if AA is downgraded from IG to HY by another credit rating agency after Moody's recent downgrade, as news articles have speculated that this could increase the likelihood of removal of AA from the Dow 30, potentially triggering a sell-off by index funds," Goldman wrote in a note.

With second-quarter earnings approaching, investors are expected to focus on the balance sheet and cash burn. Investors will be interested in other matters such as equity issuance, portfolio structuring, market outlook and new projects aimed at producing growth. Such products could include aluminum-lithium and auto aluminum rolling.

-- Written by Robert Arenella in New York

>To contact the writer of this article, click here: Robert Arenella.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs