Next week will mark the unofficial start to the Q4 earnings season. On Monday, Alcoa (NYSE:AA) is slated to announce its quarterly results after the market close. From there, a number of other mid-cap and large-cap names will be following suit in subsequent days. Here is what investors can expect from Alcoa and some of the other companies set to report next week.

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In for a Surprise?
Analysts are expecting that the aluminum producer will report Q4 EPS of 3 cents, down from 21 cents in the prior year quarter. Total revenue is predicted to rise 2.5% over the same time frame.

Shareholders of Alcoa are hoping they are not in for disappointment. Last quarter, the company had a big miss when it reported EPS of 15 cents versus a consensus estimate of 22 cents. Prospective investors will probably be doing themselves a favor if they wait on the sidelines until after Alcoa announces its earnings.

The Korean steelmaker POSCO (NYSE:PKX) is also expected to announce its Q4 earnings next week. The company has attempted to manage expectations, noting that Q4 could be its worst quarter of the year as POSCO has been anticipating an oversupply of steel to hit the market. Shares of PKX are down 23.8% on the year. (A look at the five varieties of EPS and what each represents can help an investor determine whether a company is a good value, or not. For more, see The 5 Types Of Earnings Per Share.)

On a Run
Homebuilding stocks have hit their stride in recent weeks as the National Association of Homebuilders has suggested that confidence among builders is at its highest level since May of 2010. Shares of the SPDR S&P Homebuilders ETF (ARCA:XHB) have rallied 36.25% over the last three months.

Investors in the space will be looking to Lennar (NYSE:LEN) to keep the momentum going when it checks in with its Q4 earnings on Wednesday, prior to the opening bell. Wall Street is calling for the company to report EPS of 17 cents, which would be in line with what the organization reported in Q4 last year. Total revenue is projected to climb by 6.3% on a year-over-year basis.

Lennar has been able to string together six consecutive quarters of profitability, which is commendable in an environment that has not been entirely friendly to homebuilders. Last quarter, the company noted slight upticks in average selling prices and its operating margins when compared to its Q3 in 2010. LEN shares are up 3.15% since this time last year.

The Bottom Line
The companies mentioned in this article have the potential to set the tone for the Q4 earnings season. In general top lines are expected to improve from a year ago, but the prospects for the rest of 2012 are what investors should focus on. Brightening prospects should be welcomed, but investors should maintain a healthy degree of skepticism given recent market volatility. (For related reading, see When Is Earnings Season?)

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At the time of writing, Billy Fisher did not own shares in any of the companies mentioned in this article.

Tickers in this Article: AA, PKX, XHB, LEN

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