Alcoa: Color on Quarter
* Stifel raises their AA tgt to $17 from $15. 2Q14 results showed that in addition to strong value-add downstream operational performance, Alcoa is also continuing to improve its upstream commodity operations. Cost reductions coupled with improving metal prices should continue to help Alcoa in 2H14 and 2015.
* Cowen notes Alcoa reported 2Q14 adjusted EPS of $0.18, exceeding our estimate of $0.13 and consensus of $0.12, primarily due to outperformance in the Primary Metals segment. Given the impressive results, they expect shares to react positively; Market Perform.
* RBC notes the outperformance relative to their estimate was driven by a lower effective tax rate than they had been assuming and higher surplus power sales in Primary Metals. EPS and GRP performed essentially in line with our expectations while Alumina came in a little below forecast. They view the results as a positive though they are somewhat cautious on the sustainability of the strong power sales in the quarter; Sector Perform.