Chinese stockpiling might pull Alcoa Corp fourth-quarter earnings down

American industrial giant Alcoa Corp (AA) is expected to post its fourth-quarter results after the market closes on Wednesday, Jan. 16.

Recently, aluminum prices spiked on the newly imposed Donald Trump tariffs. This had a domino effect on the entire industry. Back in September, Aluminum prices breached $1 per pound.

While Alcoa has predicted a full-year deficit for aluminum and alumina, the Chinese stockpiling has also impacted it negatively.

The American metal giant now expects global bauxite market to remain in surplus with increasing stockpile growth. The Chinese are touted to bump up stockpiles.

Alcoa is now expected to earn $0.44 per share on revenue of about $3.42 billion. The net profit estimate is a yearly decline of about 60%, and it gives a rough picture of where the industry is heading.

Earlier last year, Alcoa announced it laid off 686 employees from its Aviles and La Coruna plants in Spain due to low productivity.

Stocks fall as Trump hits close allies with steel, aluminum tariffs

REVISITING THE LAST QUARTER

In the previously reported third quarter, the aluminum giant did surpass analyst views for revenue and earnings, briefly sending the stock in the upward direction after the bell then.

Adjusted EPS dropped to $0.63 from $0.72 in the prior-year period, while revenue increased to $3.39 billion from $2.96 billion a year ago.

Alcoa reported a GAAP net loss of $41 million or $0.22 per share vs. net income of $113 million or $0.60 per share in the third quarter last year. This included a negative impact of $160 million for special items, due primarily to a $174 million non-cash net settlement charge from additional actions on U.S. pension and OPEB obligations.

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