Analysts revise Alcoa forecasts downward
Jul 05, 2012 | 03:02 PM
| Suzy Waite
NEW YORK A 12-percent drop in the price of aluminum in the second quarter may pressure Alcoa Inc.s earnings when the producer makes its quarterly report next week, industry analysts say.
A number of analysts have lowered their forecasts ahead of Alcoas July 9 quarterly report, anticipating the Pittsburgh-based company will kick off the earnings season with lower-than-expected results as the price of aluminum on the London Metal Exchange continues to deflate due to global uncertainty.
Although Alcoas downstream businesses likely had a strong quarter, the plunging primary price will nevertheless have a negative impact on earnings, analysts forecasted.
The cash aluminum contract averaged $1,884.50 per tonne in June, well below monthly averages of nearly $2,200 a tonne in the first quarter. Although prices have shown signs of a rebound recently, with three-month aluminum closing at $1,948 per tonne on Thursday, up from $1,902 per tonne on Monday, it is still down some 17 percent from this years high of $2,349 per tonne logged in late February.....
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