|Bid||2.46 x 0|
|Ask||2.48 x 0|
|Day's range||2.35 - 2.48|
|52-week range||1.66 - 2.60|
|PE ratio (TTM)||21.02|
|Earnings date||21 Feb. 2018 - 26 Feb. 2018|
|Forward dividend & yield||0.25 (9.99%)|
|1y target est||2.08|
Alcoa (AA) expects global aluminum demand to exceed supply in 2018 on China’s supply-side reforms. Notably, China has been curtailing its polluting industrial capacity in a bid to control its rising smog levels during the winter months.
In this part, we’ll see what Alcoa’s (AA) management had to say about aluminum’s demand-supply equation during its 4Q17 earnings call. First, let’s see what Alcoa had to say about the 2017 market balance. According to Alcoa, global bauxite and alumina markets (AWC) were balanced in 2017.
Alcoa (AA) reported its 4Q17 earnings on January 17, 2018, after the markets closed. The company posted an adjusted EPS (earnings per share) of $1.04 in 4Q17. Alcoa’s 4Q17 earnings fell short of analysts’ top line and bottom line estimates.
Alcoa (AA) expects to generate adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) between $2.6 billion and $2.8 billion in fiscal 2018. The guidance has baked in average LME (London Metals Exchange) aluminum prices of $2,200 per metric ton and API (alumina price index) of $390 per metric ton. In arriving at this guidance, Alcoa has assumed almost flat alumina (AWC) and bauxite shipments as compared to 2017 with a slight decrease in its aluminum shipments (CENX).
China is curtailing its polluting steel and aluminum capacity in a bid to address rising pollution levels. China exported 440,000 metric tons of unwrought aluminum last month—a YoY (year-over-year) increase of 12.8%. Last year, China’s aluminum exports rose 4.5%—compared to 2016.
In this article, we’ll see what the market would like to hear on Alcoa’s 4Q17 earnings call. For metal and mining companies (RIO)(AWC) like Century Aluminum (CENX) and South32 (S32), the macro environment—which includes metal and raw material prices—is equally if not more important than company-specific factors. Speaking of aluminum, we’ve seen that prices are sensitive to China’s demand-supply dynamics.
Alcoa’s (AA) 4Q17 earnings are expected on January 17. Notably, for mining companies, sales are a function of external shipments and commodity prices. Bauxite, alumina, and aluminum are the key commodities that Alcoa sells.
One of the factors that boosted industrial metal prices in 2017 was better-than-expected demand from China. Its construction sector was strong in 1H17.
After its split, Alcoa (AA) became a pure-play aluminum producer (S32) (CENX). Like other aluminum producers, Alcoa’s fortunes are tied to metal prices.
Last month, China exported 380,000 metric tons of unwrought aluminum, which is similar to the corresponding month in 2016.
Aluminum was among the best-performing base metals in 1H17. It outperformed several other industrial metals including copper.
DUBLIN--(BUSINESSWIRE)-- The "Alumina, Synthetic Corundum and Aluminum Hydroxide Market in China: Business Report 2017" report has been added to Research and Markets' offering. The report presents ...