Alcoa will release its quarterly report on Thursday, and even though the company is no longer a member of the Dow Jones Industrials, it still has the reputation for starting off earnings season. For the first time in a long time, Alcoa has investors excited about its future prospects, even as it and fellow industry peers Aluminum Co. of China and Rio Tinto's Alcan subsidiary have continued to deal with challenges from a glut of supply and resulting low prices for the lightweight metal.

One peculiarity about the aluminum industry is that unlike almost every other sector of the economy, aluminum has never really recovered from the recession and market meltdown in 2008. Despite strong demand from certain corners, especially the aluminum-hungry aerospace industry, metal prices have languished, and that has held back Alcoa from gaining back anything more than a tiny fraction of its roughly 85% decline in share price during the financial crisis. Finally, though, the stock has started to press higher recently. Could that signal an end to the downturn in aluminum? Let's take an early look at what's been happening with Alcoa over the past quarter and what we're likely to see in its report.

Stats on Alcoa

Analyst EPS Estimate

$0.06

Change From Year-Ago EPS

0%

Revenue Estimate

$5.40 billion

Change From Year-Ago Revenue

(8.5%)

Earnings Beats in Past 4 Quarters

3


Source: Yahoo! Finance.

Will Alcoa earnings stay the course this quarter?
In recent months, analysts have been a bit more pessimistic about Alcoa's earnings prospects, cutting $0.02 per share from their earnings estimates for the full 2014 year. The stock has defied that pessimism, though, jumping 32% since early October.

Alcoa's third-quarter earnings report got the company off on the right foot, with the company reversing a year-earlier loss with a modest profit of $24 million for the quarter. In particular, investors were pleased with certain aspects of the company's guidance for 2014, with strong gains in China expected from the automotive and heavy truck and trailer segments. Anticipated gains in global aerospace demand of 9% to 10% should also help Alcoa and peers Chinalco and Rio Tinto Alcan in their efforts to keep prices up.

But the big news of the quarter came later in October, when Alcoa announced a joint venture with Russia's VSMPO-AVISMA, a producer of aircraft-grade titanium. The goal of the consortium will be to provide a one-stop shop for the titanium and aluminum demands of the aerospace industry, which expects trillions of dollars of new orders in the next 20 years. Given the reputation of both aluminum and titanium as being lightweight and durable, combining forces makes sense for both companies and should give Alcoa a competitive advantage over Rio Tinto Alcan and Chinalco in working with aerospace customers.

Moreover, Alcoa has plenty of opportunities to further its growth in the coming years. Big gains in car and truck sales in the U.S. have reinvigorated the auto industry, giving manufacturers more latitude to consider energy-saving engineering efforts that could boost the amount of aluminum used in new vehicle designs. Similarly, supply deals with Airbus and Boeing point to the need for high-quality aluminum production for mission-critical applications in aerospace and defense, while other uses in energy and electronics will also be critical to Alcoa's long-term success.

In the Alcoa earnings report, watch closely for further signs of overall economic recovery not just in the key China region but also in hard-hit areas like Europe, which has been taking steps toward coming out of recession recently. Shareholders are already anticipating better results for Alcoa, so the company will need to show signs of progress in order to avoid disappointing investors on Thursday.

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The article Have Alcoa Inc Earnings Finally Turned the Corner? originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool has no position in any of the stocks mentioned. 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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Gumby

Aluminium is quite cumbersome in size when it comes to weight .. actually, metal thieves are not as hot about aluminium as copper becaue copper is smaller and heavier than aluminium and three times as valuable as aluminium per pound. It means copper is nine times smaller than aluminum for the same money you would get for stealing . Easier to hide and carry copper than aluminmium.. So I dont see why we should be SPOOKED about higher aluminium prices that metal thieves would have trouble hiding them. Nine times as big !@!! So it is probably A GREAT HOAX ABOUT POTENTIAL ALUMINIUM THEFTS THAT MAY OCCUR IF PRICES GO UP A LOT LIKE $4 A POUND.. i DONT THINK THIEVES WOULD WANT TO TOUCH ALUMINMIUM AT $4 A POUND. Maybe you will have to lock your automobile wheels with lock nuts if they are made of aluminium which is very common today. Metal thieves would jack up your cars for your wheelies..
That is for sure. I am not sure about those streetlight poles made of aluminium dotting all over America by millons !! Aha, those highway signs , nah, they wont bring much money ...who knows//?? Hmmm let me think of something else...

January 07 2014 at 2:47 PM Report abuse rate up rate down Reply
Gumby

Foreign aluminium smelters outside China are beginning to drop like dead flies . It is about time !!! Aluminium prices will go up but not much as you have to understand that metal thieves are still alive and prowling around!! They are eyeballing at everything aluminium all over the landscape and ready to steal at first news of high aluminium prices past $2 a pound ( 80 cents now). Aluminium prices can safely go up to $1.50 because scrap alumnium is much lower ($?? maybe 50 cents or more) which is not attractive to metal thieves . Even at $1.50 a pound, Alcoa can make good profits upstream but not as great as ten years ago. More importantly, money losing smelters around the world are slowly giving up waiting for alumiiujm prices to go up again which will be a very agonzing slow pace unless they call it quit sooner the better. Sorry about the job losses. Hope they will find jobs soon enough. I care about workers. Aluminium prices are still a joke today! This is an understatement! Workers have metal thieves to blame not investors.. Government is probalby to be blamed for not regulatintg scrap metal dealers at all. Who want to touch those low lifers anyway??

January 07 2014 at 2:42 PM Report abuse rate up rate down Reply
Gumby

Aluminium prices are simply SPOOKED DOWN from copper thefts that cost billions of dollars to repair and replace stolen copper fixtures all over the world! It doesnt matter that demand growth was high for aluminium, the supply (upstream smelters, refining, mining) are told to CRANK UP MILLIONS OF TONS MORE than is NEEDED to SQUASH ALUMINIUM PRICES AND FRUSTRATE POTENTIAL ALUMINIUM THIEVES FROM STEALING ALUMINIUM THAT IS EVERYWHERE YET UNSEEN TO THE UNEDUCATED EYES OF ORDINARY PEOPLE. It is so easy to steal aluminium and to hock it to dishonest scrap metal buyers. The govenment choose the easy way out by encouraging more power generation to support very fast growing aluminium production in the last 10 years that ALREADY DOUBLED!!!!!!! YES DOUBLE FROM 30 MILLON TONS TO 60 MILLON TONS NOW! Alcoa should know that aluminium prices will be very low under pressure. Alcoa had worked to expand downstream operations again after shutting down a lot of downstream operations ten years ago that halved ALCOA 's workforce from 120,000 to 60,000 now. Alcoa is starting all over again with more advanced and more profitable downstream operations that enjoy less competition due to high technology. Alcoa should be announcing a big surprise in earning this quarter because Alcoa had already started making moves , real moves that makes money now.. and it is just beginning now. It is no longer about aluminium prices anymore as Alcoa is not building too much upstream operations except some expansions and partnerships. Alcoa is back to manufacturing downstream in a big way again. This is good news !! Do not wait too long to jump in, you will be too late if you hesitate ...I cannot pinpoint the exact date to jump in so I jumped in now. I am 90% sure that Alcoa will earn big this Thursday Jan 9th 2014!! How do 25 cents sound to you?

January 07 2014 at 2:33 PM Report abuse rate up rate down Reply