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What to expect from Alcoa’s earnings

Aluminum giant outlook for global aluminum demand growth could be at risk

Alcoa Inc. will kick off on Wednesday what is expected to be the weakest overall earnings-reporting season for the S&P 500 companies in at least 2 ½ years, and the best thing going for the aluminum giant could be how low investor expectations have dropped as aluminum prices continued to decline during the quarter.

At the end of the quarter, the company AA, -2.49% announced plans tocompletely stop smelting at its Brazilian facility by the middle of April and take a one-time charge of $10 million to $15 million as part of its plan to cut costs. Alcoa also announced a deal to buy titanium products maker RTI International Metals in a deal valued at $1.5 billion, as it looks to expand outside the mining and smelting business.

Investors will be watching to see if Alcoa, which reports results after the closing bell, remains as upbeat on the outlook for global aluminum demand as it was three months ago, even as prices have continued to fall. Given how far the stock has fallen since Alcoa reported fourth-quarter results, investors appear to be expecting the worst.