Alcoa reports second-quarter earnings results

Aluminum manufacturing giant Alcoa Inc. reports second-quarter earnings results after the markets close Monday.

WHAT TO WATCH FOR: Key factors will be whether slower demand and lower aluminum prices will affect the Pittsburgh company's profits.

Alcoa has forecast a 10 percent increase in global aluminum consumption this year, driven by strong demand from China and improving demand in the U.S. and Europe.

Since then, China's economic growth has shown signs of moderating, although industrial production and other indicators remained relatively strong, according to a June report from the World Bank.

In addition, Europe is working to resolve a debt crisis in financially troubled countries such as Greece, Portugal and Spain.

About half of Alcoa's sales are in the U.S., 27 percent in Europe, 15 percent in the Asian-Pacific region and the rest in North and South America.

WHY IT MATTERS: Alcoa is the first company in the Dow Jones Industrial average to issue earnings results. Its performance can reflect economic trends because of its diverse customer base, which ranges from aerospace and construction to electronics and beverage cans.

WHAT'S EXPECTED: Analysts surveyed by Thomson Reuters, on average, forecast earnings of 12 cents a share on revenue of $5.05 billion.

Argus Research analyst Bill Selesky says aluminum demand has slowed in recent weeks, largely because of China's economy. However, Selesky sees improving demand in the aerospace and industrial markets.

"With that （China） demand being slightly slower, that creates the potential for the company to maybe have a slightly lower earnings number," Selesky said. "I think overall they're going to remain positive."

In a research note published Friday, Citi Investment Research analyst Brian Yu predicted earnings of 10 cents or 11 cents a share, tempered by a drop in aluminum prices.

LAST YEAR'S QUARTER: Alcoa reported a net loss of $454 million, or 47 cents a share, on revenue of $4.24 billion.