Alcoa Inc (NYSE:AA) shares rose as much as 2% today, the day before the company releases its next earnings report. The company had a difficult 2013, and investors are undoubtedly hoping this year will be better. But will it? Investors and analysts seem to be pretty positive heading into tomorrow’s report.

Alcoa

Aloca deals with weak aluminum prices

The biggest problem Alcoa saw in 2013 was slumping demand for aluminum. The result was slumping prices as well. However, IG reports that prices have seen a lift thanks to last month’s announcement about tapering quantitative easing. Of course as the U.S. dollar strengthens, it usually increases downside pressure on aluminum and commodities, however, low interest rates, plus indications that the U.S. economy is improving, seem to have mitigated this pressure for now.

What analysts expect from Alcoa

Consensus estimates indicate that Wall Street expects Alcoa Inc (NYSE:AA) to report earnings of 5 cents per share on $5.43 billion in revenue for the fourth quarter. That would be an 8% decline in revenue compared to the same quarter a year ago. But will the slight lift in aluminum prices stick around this year? Analysts are split on that question.

Writing on The Street, Richard Saintvilus said he believes it will take time for aluminum prices to return to “robust” levels. However, he says the worst is over for Alcoa, and the focus will be shifting from aluminum prices to guidance and comments made by management.

Alcoa management to set the tone for 2014

He notes that management at Alcoa Inc (NYSE:AAPL) has remained upbeat about the prospects for the company and has maintained their expectations for a 7% increase in demand for aluminum for the 2014 fiscal year. That’s a 1% increase from last year’s guidance, and Saintvilus thinks that this would be an encouraging sign for 2014.

However, he suggests that if management changes its guidance to 6% growth, investors shouldn’t see this as a lack of confidence. He still sees plenty of value in Alcoa Inc (NYSE:AA), even if there are indications from management that weak aluminum demand will continue this year.