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Zacks Analyst Blog Highlights: Alcoa, BP plc, Apache, ExxonMobil and ConocoPhillips


CHICAGO--(BUSINESS WIRE)--Zacks.com Analyst Blog features: Alcoa Inc. (NYSE: AA), BP plc (NYSE: BP), Apache Corporation (NYSE: APA), ExxonMobil Corporation (NYSE: XOM) and ConocoPhillips (NYSE: COP).

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Here are highlights from Monday's Analyst Blog:

Alcoa Beats by a Penny

For the first time in the company's last 3 quarters, Alcoa Inc. (NYSE: AA) has beaten quarterly earnings estimates. The so-called "lead-off hitter" of every quarterly earnings season, Alcoa posted a gain of 13 cents per share, outshining the zacks Consensus Estimate of 12 cents, on revenues of $5.2 billion in the company's fiscal 2nd quarter.

Alcoa shares had closed down 7 cents on the day, and they are currently trading down near its 52-week low. In fact, Alcoa is the worst-performing Down component year-to-date, having fallen over 32% since New Year's 2010.

And although Alcoa did, in fact, beat estimates for the first time since the September 2009 quarter, the 12 cents per share Zacks consensus estimate had been cut in half from 24 cents per share at the start of the quarter. Lower aluminum prices, higher input costs, company restructuring charges and fears of lesser demand as the global economy continues to struggle in a highly cyclical aluminum and alumina industry have kept a negative tone on AA stock among analysts and investors.

That said, the good news in Alcoa's second quarter earnings report is that the company has increased its global aluminum consumption forecast for this year from 10% to 12%. And with today's earnings beat, Alcoa has posted a major year-over-year earnings improvement. Second quarter 2009 results came in at -26 cents per share, as opposed to today's +13 cents.

Analysts had been in a decidedly downward trend over the past month on AA. Ten of the 15 analysts covering Alcoa had revised estimates downward for both the second quarter and fiscal 2010. Alcoa currently has a Zacks #3 Rank (Hold) but a longer-term recommendation of Underperform.

Will BP Offload Alaska Assets?

To cope with the financial stress of paying Gulf of Mexico (GoM) oil spill related costs, BP plc (NYSE: BP) is in talks to sell about $12 billion assets, including its stake in Alaska's Prudhoe Bay oil field to U.S. oil company Apache Corporation (NYSE: APA), as reported by The Sunday Times of London.

Although neither of the companies commented on the news, it is no doubt a major step for BP following the its suspension of its dividend and trimming of capital spending.

BP has a 26% stake in the Prudhoe Bay oil field, partnered with ExxonMobil Corporation (NYSE: XOM) holding 36% and ConocoPhillips (NYSE: COP) holding 36%. Prudhoe Bay remains the major field in North America even after decades of production.

Late last week, during the conference call, Exxon had also stated that it may review BP's assets for a possible buyout.

BP has been taking several steps to fund the spill related costs and stepping forward to fix the crisis. The talks come amid BP's efforts to remove a device capturing oil from its leaking Macondo well, as the company prepares to install a more efficient collection system.

It appears that BP is not all about the GoM crisis, however. A consortium led by BP that is operating the massive Azeri-Chirag-Gunashli oil field in the Azeri sector of the Caspian Sea has awarded six contracts totaling $814 million for development of the Chirag project.

After touching a 14-year low of $27.02 on June 25, BP's share price has risen about 26% due partly to progress on the relief well and the company's initiatives toward financial management. We maintain our Neutral recommendation for BP.

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