Alcoa (AA) is set to report earnings after the market closes on Tuesday, October 7. Alcoa is the world leader in the production and management of primary aluminum, fabricated aluminum and alumina combined, through its active and growing participation in all major aspects of the industry.

AA is expected to earn a profit of 54 cents per share for its 3rd quarter. We expect the gaming retailer to announce earnings that will miss investors’ and analysts’ expectations as estimates have been dropping like a rock throughout the quarter.

In light of the current global economic conditions and falling aluminum prices, we believe it will be difficult for Alcoa to paint a pretty picture going forward. Despite the consensus number falling 20 cents in the last 90 days, we don’t feel analysts’ have shaved their outlook enough. We wouldn’t be surprised if profits come in at least a nickel short. Add in a bleak forecast for the months ahead and we could see AA trade at 10 year lows between $12.5-$15 per share.

Suggested Stop: $23.00