Alcoa Gears Up to Post Q4 Earnings: What Lies Ahead for the Stock?

Alcoa Corporation AA is likely to register an increase in the top line from last year’s quarterly reading when it reports fourth-quarter 2024 earnings on Jan. 22, after market close. The Zacks Consensus Estimate for revenues is pegged at $3.4 billion, reflecting an increase of 30.1% from the prior year’s quarterly figure.The bottom line of this leading producer of bauxite, alumina and aluminum products is expected to have increased from the earlier year’s quarterly figure. Over the past 60 days, the consensus estimate for earnings per share has increased 18.2% to 91 cents, indicating an increase of 262.5% from last year’s quarterly level.The company has a trailing four-quarter earnings surprise of 51.5%, on average.Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.Key Factors to Note Ahead of AA’s ResultsAn increase in demand for aluminum in both Europe and North America is expected to have benefited Alcoa’s Aluminum segment in the fourth quarter of 2024. Also, solid momentum in the building & construction markets and recovery in the packaging sector are likely to have aided the Aluminum segment’s sales.  For the fourth quarter, the Zacks Consensus Estimate for the Aluminum segment’s third-party sales is $2 billion, implying an 18.9% increase from the year-ago number. The consensus mark for the Aluminum segment’s total sales is pegged at $1.97 billion, indicating a 16.7% rise from the year-ago reported number.Alcoa’s Alumina segment has been reaping the benefits from higher shipments of alumina and increased smelter production. The consensus mark for the Alumina segment’s third-party sales is pegged at $1.3 billion, implying a 72.3% increase from the year-ago number. The consensus mark for the Alumina segment’s total sales is pegged at $2.1 billion, indicating a 54.1% rise from the year-ago number.Synergistic gains from the acquisitions made by the company are expected to have boosted revenues. In August 2024, Alcoa acquired Alumina Limited. This acquisition enhanced its position as a pure-play and upstream aluminum company worldwide.Also, lower raw material and decreasing energy costs across both segments are likely to have supported the company’s performance.However, tightness in the bauxite market in China, due to safety and environmental inspections in Northern China, is expected to have hurt AA’s sales. Also, the curtailment of the Kwinana refinery in Australia is likely to have weighed on the company’s sales.Given the company’s extensive geographic presence, its operations are subject to global political risks and foreign exchange headwinds. A stronger U.S. dollar is likely to have hurt Alcoa's overseas business in the quarter.Alcoa Price and EPS Surprise Alcoa price-eps-surprise | Alcoa QuoteEarnings WhispersOur proven model predicts an earnings beat for AA this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. Earnings ESP: Alcoa has an Earnings ESP of +7.33% as the Most Accurate Estimate is pegged at 98 cents per share, which is higher than the Zacks Consensus Estimate of 91 cents. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.Zacks Rank: Alcoa currently carries a Zacks Rank of 2.Stocks to ConsiderHere are some companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings in this reporting cycle.EnerSys ENS has an Earnings ESP of +15.67% and a Zacks Rank of 2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The company is slated to release third-quarter fiscal 2025 (ended December 2024) results on Feb. 5. EnerSys’ earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 1.7%.Dover Corporation DOV has an Earnings ESP of +0.10% and a Zacks Rank of 3 at present. The company is scheduled to release fourth-quarter 2024 results on Jan. 30.Dover’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 4%.Emerson Electric Co. EMR has an Earnings ESP of +0.73% and a Zacks Rank of 3 at present. The company is slated to release second-quarter fiscal 2024 (ended December 2024) results on Feb. 5.Emerson’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 6.7%.Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.Just Released: Zacks Top 10 Stocks for 2025Hurry – you can still get in early on our 10 top tickers for 2025. 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