Alcoa officially kicks off third quarter earnings season after the bell today, in what is arguably the most important earnings season. While the second quarter didn't disappoint, it was more about companies beating the bottom-line versus topline growth.
Ahead of Alcoa’s report, investors appear to be bullish, with its shares trading in positive territory. Analysts polled by Thomson Reuters expect Alcoa to report a loss of $0.09 per share, making it the company's fourth quarterly loss in a row. But with the recent advance in aluminum prices, analysts are hopeful this may prop up profits at the aluminum giant.
David Silver, Research Analyst at Wall Street Strategies has tracked aluminum prices, which have had a strong run over the past six months. Silver said that has traded "from a low of approximately $0.65 per pound to the figure today of around $0.85 per pound."
For now, Silver doesn't advise committing new money into Alcoa, given that the stock has made a great move and aluminum prices have advanced dramatically since the March lows. What will change his mind is if pricing power and demand comes in stronger than expected.
Do not miss our in-depth coverage of Alcoa’s numbers when the aluminum giant releases its result on Closing Bell at 4pm ET. Alcoa's President & CEO Klaus Kleinfeld breaks down the numbers with Maria Bartiromo in an exclusive interview, ahead of his call with analysts.
Disclosure: David Silver does not have any personal and company holdings in Alcoa, or any investment banking or other conflicts.
Liza Tan contributed to this article.
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