• Alumina and Primary Metals ATOI should be flat sequentially: Alcoa expects alumina production to be up 150,000 tonnes versus Q1/13. However, a crusher move in Australia is expected to increase mining costs by $20 million. In Primary Metals, Alcoa expects production to increase by 15,000 tonnes versus Q1/13. Power plant outages are expected to have a $25 million negative impact and the Saudi Arabian JV should deliver another modest equity loss in Q2/13, unchanged from last quarter. Overall, Alcoa expects these two segments combined should be flat excluding LME price and currency impacts.
• Downstream businesses should be up due to continued strength in automotive and aerospace markets and seasonal increase in packaging: Alcoa expects Global Rolled Products ATOI to be up 15 – 20% in Q2/13 due to continued strength in aerospace and automotive demand, and a seasonal increase in packaging demand. Engineered Products and Solutions ATOI is expected to be up about 5% due to strength in aerospace, recovery in North American non-residential construction, and continued market share gains. We estimate the total ATOI impact is $0.02/share.
• Reporting details: Alcoa Inc (NYSE:AA) will report its Q2/13 results on Monday, July 8, 2013, after market close, with a conference call at 5:00 pm ET. Dial in: 1-877-280-4957 or 857-244-7314. Pass code: 83187914.
• Estimate revisions: We have increased our quarterly EPS estimate to $0.06 from $0.05 to account for the more favourable impact of currencies than we were previously expecting. Our annual estimates remain unchanged at this time.
