Alcoa Inc Q2 Earnings Preview

Alcoa Inc (NYSE:AA) will release its second quarter 2014 earnings after the market hours on July 8th. In the first quarter, the Aluminum giant posted impressive earnings. To some market watchers, Alcoa may not represent the bellwether of the earnings season for the industry after its exit from the Dow Jones Industrial Average, last year, but it will reflect the trends for aluminum across the industry, which is a major indicator of economic activity.

Alcoa earnings to reflect Demand trend of Aluminum

The New York-based company will give some insight on the demand of the aluminum across the end markets, specifically aerospace, in its second quarter report. The reports before the second quarter earnings claim that the numbers will be high pertaining to the strength in the aerospace and auto markets, where demand for aluminum is high.

Vanguard’s move into PE may change the landscape forever

Private equity has been growing in popularity in recent years as more and more big-name funds and institutional investors dive in. Now even indexing giant Vanguard is out to take a piece of the PE pie. During a panel at the Morningstar Investment Conference this year, Fran Kinniry of Vanguard, John Rekenthaler of Morningstar and Read More

In April 2014, the company upgraded its growth expectation from the aerospace market to 8%-9% from 7%-8% considering the demand for both large commercial aircraft and regional jets and sustained growth in the business jet market.

In the previous month, Alcoa made its presence felt strongly in the aerospace market, when it agreed to buy U.K. based leading jet engine components maker Firth Rixson for $2.85 billion. Following the acquisition, the company will be able to revive its aerospace business and gain momentum in the fast growing market through a broad spectrum of high-growth, value-add jet engine components.

Cost cutting, productivity to support earnings

In the previous quarter, the company posted 80% increase in the earnings. For the first quarter results, CEO of the company said that the speed of transformation in the company is increasing.

The analysts forecasts Alcoa to post declined revenue for the quarter by more than 3% year over year to $5.64 billion. Alcoa is expected to post earnings per share of 12 cents, an increase over the reported profit of around 7 cents per share in the corresponding quarter of the previous year. Earnings per share estimates remain consistent over the past two months in the range of $0.09 to $0.16.

Second quarter earnings are expected to get support from the aggressive cost cutting and productivity improvement action. Additionally, the company is investing heavily and continues to cut down the cost and contain capacities in its upstream business.

Alcoa is a global leader in multi-material engineering and manufacturing, especially in Aerospace, delivering value-add products made of titanium and nickel.