Earnings Preview For Alcoa (AA)

Alcoa, Inc. AA reports 2011 first-quarter earnings after the closing bell on Monday. Analysts expect the company to earn a profit of $0.27 per share on sales of $6.30 billion. This is considered the first major report of each earnings season, so it garners special attention. Earnings estimates have increased about 10% over the past three months. The company engages in the production and management of aluminum, fabricated aluminum, and alumina. The company operates in four segments: Alumina, Primary Metals, Flat-Rolled Products, and Engineered Products and Solutions. Aluminum prices have increased recently, which should put Alcoa in good position to report strong results. Raw materials prices have also risen, but most analysts are confident that the company will at least meet the consensus estimate. The stock has performed well and is trading near a new 52-week high. Investors have priced in the prospect of Alcoa beating estimates, so a bullish outlook by management is a must in order for the stock to breakout to new highs. Alcoa is currently trading at 13.4x 2011 estimates of $1.35 per share, which is in-line with the broader market.