It may be noted that the company has surpassed analysts’ expectations in each of the trailing four quarters.
Over the past few quarters, Alcoa has been working to improve its third-party bauxite sales. Analysts expect revenue from the bauxite unit to be almost flat year-over-year, even as shipments edge up over 1%.
Alumina segment is an area of concern due to a supply glut in the global markets and demand decline in China. Revenue from this segment is expected to decline sharply in the double digits, weighing on the top line.
Alcoa shares have gained 5% since the beginning of this year, underperforming the market. In the trailing 52 weeks, the stock has lost almost half of its value.
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In Q4
In the last reported quarter, Alcoa’s adjusted earnings came in at $0.66 per share surpassing street estimates of $0.62 per share. It’s worth noting that for the same period last year, EPS was $1.04. The decline in earnings was primarily due to a drop in commodity prices which impacted the bottom line.
Revenue for the fourth quarter was $3.34 billion, which was in line with analyst estimates of $3.35 billion and saw an increase of 5% sequentially. The improvement in top line was a result of a spike in metal prices in the first half of 2018 and debt reduction measures taken by the firm.