Earnings Outlook For Alcoa

Alcoa AA releases its next round of earnings this Thursday, July 15. Here is Benzinga's essential guide to Alcoa's Q2 earnings report.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Alcoa EPS is expected to be around $1.34, according to sell-side analysts. Sales will likely be near $2.64 billion. Alcoa reported a loss of $0.02 when it published results during the same quarter last year. Sales in that period totaled $2.15 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Thursday, EPS would be up 6800.0%. Revenue would be have grown 22.91% from the same quarter last year. Here is how the company's reported EPS has stacked up against analyst estimates in the past:

Stock Performance

Shares of Alcoa were trading at $35.62 as of July 13. Over the last 52-week period, shares are up 169.46%. Given that these returns are generally positive, long-term shareholders should be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Alcoa is scheduled to hold the call at 17:00:00 ET and can be accessed here.