Goldman Has Low Expectations For Alcoa's 3Q

Goldman Sachs writes for Alcoa Inc. AA that "We mark-to-market our Alcoa model for 3Q and update our prices (average 15 day lag aluminum price of $0.93 per pound versus our prior estimate of $0.94) and currency impact assumptions, which combined, have a negative impact of $0.01 on EPS. Additionally, we add a $13 million (or $0.01) charge to the interest expense associated with the recent redemption of $330 million in callable bonds. The net result is adjusted EPS of $0.07, down from our earlier estimate of $0.09. Our revised 3Q2010 estimate excludes a recently announced one-time charge of $0.02 per share ($45 million pre tax or $25 million after-tax) associated with the recovery and ramp-up of the Sao Luis alumina refinery in Brazil. As such, we expect reported EPS, including adjustments, to be $0.05. In addition, there could be additional charges related to a recent fire at Alcoa's Tennessee facility, however, we believe this disruption will mostly impact 4Q results." Goldman maintains its Neutral rating and $12 price target. Alcoa Inc. closed yesterday at $11.70.