Summary
- Alcoa's adjusted EPS came in well below expectations in the first quarter.
- Falling commodity prices and outperforming input costs damaged the company's bottom line.
- Nonetheless, if China's economic recovery is for real, we might be looking at a very interesting trade.
The Pittsburgh, PA-based aluminum producer Alcoa (AA) just released its first quarter earnings. The company missed EPS expectations while sales failed to grow after a solid streak of strong quarters in both 2017 and 2018. It's the economy which is doing a number on Alcoa. Falling industrial metals and rising input costs are giving this company a very hard time. Nonetheless, I am putting the stock back on my watch list as we might be in for an interesting buying opportunity over the next few weeks/months.
Source: Alcoa
Apparently, The Big Picture Is Rather Weak
First quarter adjusted EPS had its first expectations miss since Q4 of 2017 after the previous 2 quarters both had convincing earnings beats. Adjusted EPS came in at -$0.23 which is well below expectations of -$0.17. It is also significantly lower compared to the prior-year quarter when EPS totaled $0.77. Back then, the growth rate was 22%.
