UPDATE: End of a stock-market era: Alcoa breaks tradition of being first to report earnings

01/13/17 07:02 AM EST

By Ciara Linnane, MarketWatch

Alcoa has split in two and its new parent will no longer be first out the gate each quarter

The U.S. fourth-quarter earnings season will kick off this Friday, and its launch will mark the end of an era.

The first earnings will come from three banking giants, J.P. Morgan & Co.(JPM) , Bank of America Corp.(BAC)and Wells Fargo & Co.(WFC) .

That marks a break with a long tradition. Aluminum giant Alcoa Inc. has unofficially started the earnings season for years but will no longer do so, now that it has split into two companies to separate its raw aluminum operations from its aerospace and automotive supply businesses.

Don't miss:Alcoa to release last earnings before it splits up (http://www.marketwatch.com/story/alcoa-to-release-last-earnings-before-it-splits-up-2016-10-10)

The split was completed on Nov. 1, with a new Alcoa Corp.(AA)housing the traditional metals business. The parent company is now named Arconic Inc.(ARNC)and will sell parts to aerospace giants like Boeing Co.(BA) , Airbus Group SE(AIR.FR)and Lockheed Martin Corp.(LMT)made out of high-tech alloys, and offer lightweight alloys to car companies including Ford Motor Co.(F) , General Motors Co.(GM)and Fiat Chrysler Automobiles N.V.(FCA.MI) .

(https://sw.graphiq.com/w/jYyDP17w3PL)

Alcoa had long struggled with low prices in an aluminum glut created by China, while the businesses now housed in Arconic were expected to enjoy stronger growth. The split was the idea of Arconic Chief Executive Klaus Kleinfeld, who had led Alcoa since 2008 and viewed the move as a way to create "two leading-edge companies (http://news.alcoa.com/press-release/alcoa-separate-two-industry-leading-public-companies-completing-successful-multi-year), each with distinct and compelling opportunities," as he said in the September 2015 statement announcing the split.

Alcoa, which has its roots in 19th-century Pittsburgh, was long a stock-market darling. The stock was a member of the Dow Jones Industrial Averagefor 54 years until it left that index in 2013, to be replaced by athletic-apparel maker Nike Inc.(NKE) .

See also:Car technology in 2017: Trends to watch (http://www.marketwatch.com/story/car-technology-in-2017-trends-to-watch-2017-01-10)

Arconic will report its fourth-quarter earnings on Jan 31. Its event calender for the rest of 2017 shows it will report first-, second- and third-quarter earnings toward the end of the month after quarter-end, signaling it will no longer be the first company out of the gate.

See:Alcoa spinoff Arconic in $1 billion Airbus deal (http://www.marketwatch.com/story/alcoa-spinoff-arconic-in-1-billion-airbus-deal-2016-11-07)

Alcoa will report its fourth-quarter earnings on Jan. 24 after the market close. The company does not have an event calendar for the rest of the year on its website.

Arconic shares have fallen nearly 3% since the day of split, while Alcoa has rallied 54%. The S&P 500has gained 6.8% in the same time frame.

The average rating on Arconic's stock from FactSet analysts is overweight, with an average share-price target of $21.86, compared with Thursday's closing price of $21.00.

The average rating on Alcoa is hold, with an average share-price target of $30, which is below its current trading level above $33.04.

-Ciara Linnane; 415-439-6400; AskNewswires@dowjones.com

 

(END) Dow Jones Newswires

01-13-17 0702ET

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