Alcoa up on metal price rise, earnings optimism
(Reuters) - Shares of Alcoa Inc (AA.N) rose 4 percent on Tuesday as the price of aluminum neared a two-year high and analysts forecast strong quarterly earnings when the company reports its results next week.
"The economic outlook does look better and the metal price is higher," said analyst Charles Bradford, of Affiliated Research Group. "Their earnings could be better than the consensus estimate."
Next Monday, Alcoa kicks off earnings season and is expected to post a big increase in fourth-quarter profit. Analysts currently expect a profit of 19 cents per share -- up from 1 cent per share in the same quarter of 2009, according to Thomson Reuters. Revenue is also seen jumping by $250 million to $5.68 billion.
Aluminum prices, which dropped sharply after the recession hit in late 2008, rose 11 percent last year - 5 percent in the fourth quarter alone - and now stand near a 2-year peak of $2,500 per tonne.
On Monday, Deutsche Bank upgraded Alcoa and raised its share-price target citing an expected rise in aluminum prices and a belief that the metal giant has turned the corner from an operational point of view.
In morning trading on the New York Stock Exchange, Alcoa shares were 4 percent higher at $16.44.
www.reuters.com/article/idUSTRE70345420110104
www.tech24.org/327113-industrial-goods-aa-cenx-x.html
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