The Zacks Analyst Blog Highlights: Alcoa, Aluminum Corporation Of China Limited, Rio Tinto, BHP Billiton and Nordstrom

Mon Jul 11, 2011 9:30am EDT

* Reuters is not responsible for the content in this press release.

The Zacks Analyst Blog Highlights: Alcoa, Aluminum Corporation Of China Limited, Rio Tinto, BHP Billiton and Nordstrom

PR Newswire

CHICAGO, July 11, 2011 /PRNewswire/ -- announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Alcoa Inc. (NYSE: AA), Aluminum Corporation Of China Limited (NYSE: ACH), Rio Tinto Plc. (NYSE: RIO), BHP Billiton Ltd. (NYSE: BHP) and Nordstrom Inc. (NYSE: JWN).

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter:


Here are highlights from Friday's Analyst Blog:

Earnings Preview: Alcoa

The largest U.S. aluminum producer, Alcoa Inc. (NYSE: AA) announced that it would release its results for the second quarter of 2011 after the market opens on July 11, 2011.

Alcoa kicked off the earnings season with its first quarter posting an EPS of $0.28 and exceeding the Zacks Consensus Estimate by a penny. This excludes the negative impact of special items or $0.01 cent per share, including EPS of $0.27.

With respect to earnings surprises, the company outdid the Zacks Consensus Estimate in the trailing four quarters. This is reflected in the average earnings surprise of 18.14%, with positive surprises in each of the quarters involved.

First Quarter Review

Revenues for the quarter were $5.96 billion and missed the Zacks Consensus Estimate of $6.112 billion. Revenues, however, increased 22% year over year, helped by rising prices for aluminum and alumina.

The company's adjusted EBITDA of $955 million was the best the company has seen since its third quarter of 2008, leaping remarkably by 60% over the year-ago quarter.

The company posted improved profits across all its segments. This was followed by revenue growth in the end-markets led by double-digit increases in packaging, automotive, commercial transportation and industrial products.

Alumina - The shipments in the reported quarter increased 3.7% year over year to 2.2 million metric tons on the production of 4.0 million metric tons.

Primary Metals - Shipments in the first quarter of 2011 amounted to 0.7 million metric tons, almost flat with the previous-year quarter. Production increased by 1.6% year over year to 0.9 million metric tons.

Flat-Rolled Products - Shipments in the quarter jumped 17.7% year over year to 0.4 million metric tons.

Engineered Products and Solutions - Shipments in the quarter jumped 16.4% year over year to 0.6 million metric tons. The segment's strong results were marked by new product developments and productivity improvements.

Agreement of Estimate Revisions

Four out of the 12 analysts covering the stock for the second quarter of fiscal 2011 have made a downward revision in the last 30 days. None of the analysts have made an upward revision in the last 30 days.

Magnitude of Estimate Revisions

The second quarter 2011 estimate was 35 cents per share in the last 60 days and increased by a penny to 35 cents per share in the last 30 days. It was flat at 35 cents in the last 7 days, however dropping again by a penny to 34 cents per share currently. The Zacks Consensus Estimate for the second quarter is 160.9% higher than the year-ago quarter.

Our Take

Alcoa Inc., a Pennsylvania-based corporation, is among the world's leading producers of primary and fabricated aluminum and alumina. It involves the technology of mining, refining, smelting, fabricating and recycling of aluminum. We believe that Alcoa's cost reduction efforts are to some extent, offsetting the negative impact of higher energy and raw material costs on profitability.

The company is divesting underperforming assets through its restructuring program. The annual global consumption of aluminum products, both upstream and downstream, is expected to double over the next 15 years. This consumption boom will be driven primarily by growth in China, India, Russia and Brazil, whose demographics are accelerating development.

Alcoa is on track to meet its 2011 financial targets, with debt-to-capital ratio improving to 33.6%, 130 basis points better than fourth quarter 2010. The company remains optimistic about the remainder of 2011 and is confident of generating positive results. Alcoa reaffirmed that global aluminum demand would grow 12% in 2011.

Currently, Alcoa has a short-term (1 to 3 months) Zacks #4 Sell rating and a long-term (6 months) Neutral recommendation.

Alcoa faces stiff competition from Aluminum Corporation Of China Limited (NYSE: ACH), Rio Tinto Plc. (NYSE: RIO) and BHP Billiton Ltd. (NYSE: BHP).

Nordstrom Comps Up 7.9%

Same-store sales at Nordstrom Inc. (NYSE: JWN) grew by 7.9% for the five-week period ended July 2, 2011. Total retail sales in June 2011 climbed 12.8% to $927 million from $822 million for the five-week period ended July 2, 2011.

Moreover, Nordstrom's year-to-date same store sales increased 7.0%. During the said period, the company's total retail sales surged 12.4% to $3.95 billion from $3.52 billion in the prior-year period.

As of July 2, 2011, Nordstrom had 116 Nordstrom full-line stores, 95 Nordstrom Racks, 2 Jeffrey boutiques and 1 clearance store. Same-store sales at Nordstrom stores (includes Nordstrom full-line stores and Direct) increased 9.0% in June, while Nordstrom Rack reported a rise of 4.6% for the five-week period ended July 2, 2011. However, same store sales at Nordstrom stores climbed 8.1% year-to-date coupled with a 2.8% increase in Nordstrom Rack.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter:

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today:

About Zacks is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at

Visit for information about the performance numbers displayed in this press release.

Follow us on Twitter:

Join us on Facebook:

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Media Contact
Zacks Investment Research
800-767-3771 ext. 9339

SOURCE Zacks Investment Research, Inc.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.