Bear Stearns Cuts Alcan Estimates

Analyst Anthony Rizzuto says seasonal trends, foreign exchange and higher input costs are responsible for the aluminum maker's earnings shortfall

Bear Stearns cuts Alcan (AL ) estimates after the company announced fourth-quarter operating earnings per share would be down about 30% sequentially.

Analyst Anthony Rizzuto says he's surprised by the timing and magnitude of the preannouncement. He says seasonal trends, foreign exchange, and higher input costs are about equally responsible for the shortfall.

He cuts his 70 cents fourth-quarter 2004 earnings per share estimate to 50 cents, $2.55 2004 earnings per share estimate to $2.35, and $3.45 2005 earnings per share estimate to $3.25. He maintains his outperform ratintg despite expected short-term stock price weakness.

Rizzuto thinks concern over execution risk will subside following a quarterly conference call on Feb. 8. He says the company is well-positioned to benefit from continued strength in aluminum prices and a recovery in the aerospace industry.

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