How To Trade Alcoa's (AA) Stock Ahead Of Earnings

On Monday July 11^th, Alcoa Inc. (NYSE:AA) will release its second quarter earnings results. The company is currently a Zacks Rank #3 (Hold) and shares are down almost 7% year-to-date.

Join David Bartosiak at 2pm EST on Monday on our YouTube channel when he looks at Alcoa’s past earnings, what is currently going on with the company, and he gives us his thoughts on their upcoming earnings announcement too.

Furthermore, Dave will investigate some potential options trades for investors looking to make a play on Alcoa ahead of earnings.

Alcoa Inc. in Focus

Alcoa Inc. engages in engineering and manufacturing lightweight materials worldwide. The company operates through five segments: Alumina, Primary Metals, Global Rolled Products, Engineered Products and Solutions, and Transport and Construction Solutions.

Alcoa is coming off of an earnings beat of 250% in its previous earnings report, posting EPS that was $0.05 higher than the Zacks Consensus Estimate. Last quarter was the second in a row that Alcoa was able to beat on earnings. The prior two quarters however the company missed on earnings though, by 50% and 17.39% respectively.

ALCOA INC Price, Consensus and EPS Surprise

ALCOA INC Price, Consensus and EPS Surprise | ALCOA INC Quote

Heading into this earnings report, our Most Accurate Estimate for Alcoa is $0.10, which is $0.01 higher than the Zacks Consensus Estimate of $0.09.

Alcoa’s aggressive cost-cutting and productivity improvement actions as of late are expected to continue to lend support to its earnings in the second quarter. Also, the aluminum pricing environment has somewhat improved as of late, due to a decline in aluminum inventories. Prices of the metal are still under pressure though, as overcapacity remains a problem.

Alcoa is also exposed to currency headwinds and weakness across some of its other markets. Weakness in non-residential building and construction in Europe is expected to continue, and the company expects a double-digit drop in the heavy duty truck and trailer market in North America this year. The North American packaging market also remains weak. Demand from the automotive market remains healthy though, with strong shipments of automotive sheet products expected to help the company’s global rolled products business.

Alcoa Inc. is currently a Zacks Rank #3 (Hold) and has seen downward revision activity as of late from analysts, which can mean a poor earnings report is on its way.

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Dave Bartosiak is the editor of the Momentum Trader and Home Run Investor service. He has over a decade of experience in the financial services industry. He has traded forex, futures, stocks, and options. Mr. Bartosiak is a frequent guest on popular business news TV channels such as Bloomberg TV. He’s also the host of a light-hearted, Millennial-minded series of videos called “Trending Stocks.”

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.