What to Look for When Alcoa (AA) Reports Q2 Earnings

Alcoa (AA) reports its 2016 second quarter earnings on Monday, July 11.
By Rachel Aldrich ,

NEW YORK (TheStreet) -- Shares of Alcoa  (AA) - Get Report are up 1.74% to $9.35 in afternoon trading on Thursday ahead of reporting 2016 second quarter earnings on Monday after the market close.

Analysts surveyed by Thomson Reuters estimate earnings of 9 cents per share on revenue of $5.18 billion. For the 2015 second quarter, the aluminum producer reported adjusted earnings of 19 cents per share on revenue of $5.9 billion.

Analysts at Morgan Stanley expect the company to beat forecasts. 

The firm noted that Alcoa may take a hit from a drop in the British pound following the Brexit decision last month, but added that it would be "one-time" and could indicate higher margins going forward.

Last year, only 3% of Alcoa's sales were from the U.K., with 24% of revenues from Europe in general.

Separately, TheStreet Ratings rated this stock as a "hold" with a ratings score of C.

Among the primary strengths of the company is its solid financial position based on a variety of debt and liquidity measures that TheStreet Ratings has evaluated. At the same time, however, TheStreet Ratings also finds weaknesses including poor profit margins, weak operating cash flow and a generally disappointing performance in the stock itself.

Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. 

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