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Alcoa (AA) Gaining Despite Earnings Miss, Boosted By Rising Aluminum Prices

Alcoa Corp. AA just released its fourth quarter fiscal 2016 financial results, posting earnings, before non-recurring items, of 14 cents per share and revenues of $2.5 billion. Currently, AA is a #3 (Hold) on the Zacks Rank, and is up 2.80% to $38.47 per share in trading shortly after its earnings report was released.

Missed earnings estimates. The company posted earnings of 14 cents per share, lagging behind the Zacks Consensus Estimate of 22 cents per share. This number excludes 82 cents from non-recurring items.

Beat revenue estimates. The company saw revenue figures of $2.5 billion, surpassing our consensus estimate of $2.2 billion but gaining 3.7% year-over-year and 9% sequentially.

Alcoa said it lost $125 million, or 68 cents a share, in Q4 compared with a loss of $826 million in the year-ago quarter.

In the fourth quarter, Alcoa secured its first major bauxite export contract out of Western Australia (WA), and was granted approval to export up to 2.5 million metric tons per annum of bauxite for five years to third-party customers.

"Alcoa's first reporting period as a new, standalone, publicly-traded company points to our ability to deliver shareholder value," said Roy Harvey, Chief Executive Officer of Alcoa. "Rising alumina and aluminum prices improved the bottom line, our alumina segment had exceptional profit growth in a stronger market environment and doubled margins, while our bauxite business also increased profits and reported robust margins.

Last year, the company split in two entities: Arconic Inc., an aircraft and car parts supplier, and Alcoa, the more traditional aluminum smelting and operations producer.

Here's a graph that looks at Alcoa's price, consensus, and EPS surprise:

Alcoa Corp. Price, Consensus and EPS Surprise

Alcoa Corp. Price, Consensus and EPS Surprise | Alcoa Corp. Quote

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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