Earnings season kicks off after the bell today as global aluminium producer Alcoa announces its results.
Analysts polled by Bloomberg are looking for the Pittsburgh, Penn., based company to report a loss of $0.01 per share, on revenue of $5.8 billion.
Shares in Alcoa are higher by more than 2.1% this afternoon, leading the Dow.
Last week, the company tempered analyst expectations when it said it would cut global smelting capacity by 531,000 metric tons, or 12%.
Alcoa plans on closing its plant in Tennessee, while also idling lines in Texas. The reductions are part of the company’s plant to lower excess supply and boost margins, after aluminium prices fell 27% from highs in 2011.
“The curtailments will contribute to the Company’s long-term goal of lowering Alcoa’s position on the world aluminium production cost curve by 10 percentage points,” the company said in a statement.
Citi analyst Brian Yu noted that the move had already pushed LME aluminium up 2.5% to $0.92 per pound. However, Yu maintained that over supply was still endemic to the industry.
“We believe more cuts will be necessary from China’s smelters if cash costs are to serve as a real economic floor on pricing,” he says. “In the interim, global exchange inventories rose 0.4% to 5,197k tonnes. LME copper eased 0.5% to $3.41/lb as global exchange inventories rose 1.7% to 553k tonnes.”
Restructuring charges will impact fourth quarter earnings by $0.15 to $0.16 per share, amounting to $155 to $165 million.
Later this week, fellow Dow component J.P. Morgan will announce its quarterly results. Click here for a full list of this week’s earnings announcements >