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Key Predictions for Q3 Earnings Reports of AA, VMI & KALU

The third-quarter earnings season is still in its early stage with 33 companies on the S&P 500 index having reported their quarterly numbers as of Oct 16. The picture so far is encouraging, with total earnings for these companies (representing 10.6% of the index's total market capitalization) having increased 13.1% year over year on 6.4% higher sales, per the latest Earnings Outlook .

Out of the companies that have reported so far, around 81.8% delivered positive earnings surprises while 75.8% surpassed revenue expectations. The pace of growth for the same group of companies is almost similar to what was witnessed in the second quarter.

The earnings growth picture for third quarter reflects considerable moderation from the second. Total earnings for the quarter for the S&P 500 index are expected to be up 2.3% year over year on a 5% increase in revenues. This is in contrast to an 11.1% increase in earnings in the second quarter on 5.5% higher revenues.

Nevertheless, the actual growth for the third quarter is expected be better than the projected level. The energy sector is expected to post stellar growth (of 122.4%) in Q3.

In this write-up, we take a sneak peek into three metal companies that are gearing up to report their third-quarter results on Oct 18.

Alcoa CorporationAA will report after the bell. Our proven model does not conclusively show that the company is likely to beat estimates this quarter. The company has an Earnings ESP of -1.06% as the Most Accurate estimate stands at 75 cents while the Zacks Consensus Estimate is pegged at 76 cents. The stock carries a Zacks Rank #1 (Strong Buy), which coupled with a negative ESP makes surprise prediction difficult. You can uncover the best stocks to buy or sell before they're reported with our Earnings ESP Filter .

Currently, the Zacks Consensus Estimate for revenues for the third quarter stands at $3 billion. The same for aluminum and alumina production for the quarter are pegged at 608,000 metric tons and 3.5 million metric tons, respectively. This reflects expected increase of 5.7% and 8.7% on a sequential basis, respectively.

ALCOA CORP Price and EPS Surprise

ALCOA CORP Price and EPS Surprise | ALCOA CORP Quote

Valmont Industries, Inc.VMI , which will report after the close, beat estimates in three of the trailing four quarters, delivering an average positive earnings surprise of 3.8%.

The stock has an Earnings ESP -2.47% as the Most Accurate estimate stands at $1.58 while the Zacks Consensus Estimate is pegged at $1.62. While the stock carries a Zacks Rank #2 (Buy), its negative ESP makes surprise prediction difficult. You can see the complete list of today's Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for revenues for the to-be-reported quarter stands at $654.2 million, reflecting expected growth of 7.2% from the year-ago quarter.

Valmont Industries, Inc. Price and EPS Surprise

Valmont Industries, Inc. Price and EPS Surprise | Valmont Industries, Inc. Quote

Kaiser Aluminum CorporationKALU , which will report after the bell, is expected to come up with a positive earnings surprise as it has an Earnings ESP of +1.38% and a favorable Zacks Rank #3 (Hold).

The Zacks Consensus Estimate for the third quarter is currently pegged at $1.09, reflecting an estimated year-over-year growth of roughly 6.4%. Further, the same for revenues for the quarter stands at $335.8 million, reflecting expected growth of 4.7% from the year-ago quarter.

Kaiser Aluminum beat estimates in three of the trailing four quarters, delivering an average positive surprise of 17.2%.

Kaiser Aluminum Corporation Price and EPS Surprise

Kaiser Aluminum Corporation Price and EPS Surprise | Kaiser Aluminum Corporation Quote

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ALCOA CORP (AA): Free Stock Analysis Report

Kaiser Aluminum Corporation (KALU): Free Stock Analysis Report

Valmont Industries, Inc. (VMI): Free Stock Analysis Report

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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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