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Alcoa could see improved Q1 results

The aluminium producer will report its first-quarter results after the closing bell tonight, and the consensus is for revenue of $5.55 billion and EPS of 3 cents.

In January, Alcoa’s fourth-quarter results disappointed traders. However, the share price has more than recovered since then. Alcoa closed at $12.47 yesterday, up nearly 17% since the company revealed worse-than-expected Q4 earnings at the start of the year. Alcoa’s Q4 results showed earnings per share (EPS) of 4 cents and revenue of $5.59 billion, while the market consensus had been for 11 cents and $5.39 billion respectively. Fourth-quarter revenue was below the third quarter figure of $5.77 billion.

Alcoa is trying to put past misfortunes behind it and start 2014 on a better footing. The firm was formerly beset by bribery charges, and has incurred a number of writedowns over the years in relation to asset valuations. Like other companies in the mineral sector, it is adjusting to falling metal prices by cutting costs and improving its efficiency. CEO Klaus Klienfeld declared in January that he is ‘clearing a path for Alcoa’s continued transformation in 2014’.

The stock is finding support at the 100-day moving average of $12.38. If today’s Q1 results are strong, the share could break the $13 mark, which has been a difficult hurdle to cross in recent weeks.

Alcoa chart

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