How To Trade Alcoa's Earnings (AA, ACH, RIO)

Aluminum giant Alcoa AA is set to kick off earnings season tonight, and analysts and Wall Street will be looking for guidance on inflation, and input costs, as aluminum is the most energy intensive commodity to produce. Wall Street analysts will be looking for earnings of 27 cents on $6.07 billion in revenues. This compares to earnings of 10 cents on revenues of $4.89 billion from a year ago. Guidance is expected to come in at 35 cents per share on $6.29 billion in revenues for the June 2011 quarter. At last check, shares of Alcoa were down 17 cents to $17.75,a loss of 0.95%‎. Given the fact we've seen natural gas costs start to creep up, traders will be looking to see what CEO Klaus Kleinfeld and his management team have to say about input costs for the rest of the year, as well as end market demand for the company's products. Other aluminum names to consider off of Alcoa's earnings reports tonight are Aluminum Corp of China ACH and Rio Tinto RIO, which owns Alcan, one of the largest aluminum producers in the world. There has been speculation that an aluminum ETF will be created, which would lead to the rise in aluminum prices, but as of yet, nothing is finalized. This rumors has been bandied about on Wall Street for years now.