Alcoa Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Alcoa (NYS: AA) reported earnings on Jan. 9. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Alcoa beat expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded, and earnings per share shrank to a loss.

Margins contracted across the board.

Revenue details
Alcoa reported revenue of $6 billion. The 11 analysts polled by S&P Capital IQ looked for revenue of $5.7 billion. Sales were 6% higher than the prior-year quarter's $5.7 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at -$0.03. The 18 earnings estimates compiled by S&P Capital IQ forecast -$0.02 per share on the same basis. GAAP EPS were -$0.18 for Q4 compared to $0.23 per share for the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 12.7%, 720 basis points worse than the prior-year quarter. Operating margin was 1.3%, 620 basis points worse than the prior-year quarter. Net margin was -3.2%, 780 basis points worse than the prior-year quarter.

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Source: S&P Capital IQ. Quarterly periods.

Looking ahead
What does the future hold?

Next quarter's average estimate for revenue is $5.9 billion. On the bottom line, the average EPS estimate is -$0.04.

Next year's average estimate for revenue is $24.9 billion. The average EPS estimate is $0.58.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 3,316 members out of 3,538 rating the stock outperform, and 225 members rating it underperform. Among 821 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 777 give Alcoa a green thumbs-up, and 44 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Alcoa is hold, with an average price target of $12.88.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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