Global business news twenty four hours a day. If Bloomberg dot com, the radio plus mobile app and on your radio. This is a Bloomberg business flash for all Bloomberg World headquarters. I'm Charlie Pellot, Stocks rallying SMP five hundred index trading at our record. We do hear from Alcola after the closing Belle Alca shares up now by two point three percent. Here's where aquities stand. We've got the SMP five hundred index up ten forty a gain of five tenths of
one percent. Nes stack up thirty six a gain of seven tenths of one percent. Down, Industrials up one hundred eight points, a gain of six tenths of one percent. Ten year down nineteen thirty seconds, with the yield of one point four two percent. Gold down a dollar seventy thirteen fifty six the ounce, a drop there of point one percent. And crude oil West Texas Intermediate now at forty five oh two down thirty eight cents, a drop of nine tenths of one percent. I'm Charlie Pellots done.
That's a Bloomberg business flash. You're listening to taking stock with Kathleen Hayes and Pim Fox on Bloomberg Radio. Well, Alcohol reporting today after the bell and officially kicking off earning season. We want to get right to what is expected, how this company is faring, and certainly it's a spinoff, it's becoming two companies. Where does that stand down does that mean for investors? Anthony Young joins us now Metals and Mining analysts for mcquarie. Anthony, welcome to the show.
Thanks for having me, guys, so set the table for us. You're an analyst. You're waiting so closely to see or watching so closely to see what happens with Alcohol. What's at the top of your list? Well, I mean this quarter is somewhat unique given the split at the company is going to be occurring at the company, So the split will pay a major factor in this earnings release.
UM investors looking for further details on that, but then also fundamentally UM trying to figure out, you know, what's going on with the aluminium business and what's going on with the downstream or their industrials business, and looking at the UM drivers that are impacting that and the profitability if they're able to generate in those two companies once they split. Anthony, tell us the details about these two companies, what are they going to do and is this also
beneficial for investors? Well, I think it will be beneficial for investors. You know. Uh, you do have this somewhat of a conglomerate with Alcoa, and you have five divisions UM. Two divisions on the upstream one that produces aluminum and alumina, and then on the downstream UM you have the world products and engineered um products and transportation and construction systems UM. So to split these into two different companies, UM, I
think it will allow management to focus on cost cutting. UM. It will also allow investors to have a better feel on how the how each of these entities should be valued separately. This is a very large picture question, but I guess it's the kind of question where people are gonna be waiting to here on the call from Alcoa. A lot going on in the world and Brexit, for example, some have contended that is going to cause a broader slow down in Europe, which accounted for about of alcohol
is fisvenue. Yes, you know, I think that the Brexit will be something that almost every company will probably address as we go through earning season. And I'm sure a lot of companies UM or some companies that miss earnings very well may point to still down in business activity UM surrounding that. But I think that when you look at the commodity space right now, UM, a low interest
rate environment UM should be UM, you know, supportive to commodities. Also, I think here in the US specifically UM, you know, when you're looking at the p m I numbers and some of these other leading indicators, UM, there's a growing sense of the recovery UM really taking holds and possibly picking up a little bit here over the coming orders. What should lead to better demand particularly for some of the industrial components that alcohol provides two things like the
aerospace and UM the power generation industries. Anthony, I know that we're looking for what earnings per share to come in for the second quarter of nine cents UH second quarter revenue estimates about five and a quarter billion. And one of as far as the split off goes, having two different types of businesses under one umbrella, does that create a kind of cushion? You know, when one part of the business does well, the other part might not,
so that there's a balance. Why is splitting it up into two so much so much better for the for the corporation. Well, you do have some advantages I think with conglomerates, but I think when you have these two UM you know, they're seemingly related, but they're also complete distinct businesses UM, it should just allow for more of
a focus. I think that UM basically, instead of having two companies or excuse me, instead of having one company that is in the process of restructuring and you know, management possibly focusing on one division or another UM and restructuring that over time, I think that with the two separate entities, you'll have two separate management teams that can focus on positioning each of their businesses UH and the best possible manner UM for where they should fit into
the supply chain with respect to UM, lightweight metals and industrial components. So I think that they're Unfortunately for ALCOHOLAH, there's a lot of work to be done here, but I think that with two management teams that work can be done more quickly than it could be under just
one roof. I think, can you give us an example of a company is similar to all coal or not who has done something like this where it failed or where it succeeded wildly, some some reason to give us why we should be doubtful this is going to work or confident that it will. Yeah, you know, I think that that is that's a tough question because you know, when you think about succeeding or failing UM, whether it be the stock price or the inherent value of the
business or the cash generation. You know, it's sort of you have different metrics that you may look at. For example, UM b HP when they split into South thirty two UM and then the legacy b HP iron ore energy, UM copper and met coal businesses. You know that the South thirty two today just picked higher than the I p O price UM where it was historically, and that that equity, at least by the market, seems to be UM more attractive now than it had been in the past.
So I guess from a stock perspective that one is now working. But you know, it was a very long time frame. It was underwater for twelve months here relative to UM the spin price, So I think that you know, it's not to say that UM Alcohol will split and both stocks will immediately trade higher UM going into that event, but I think that a split will again allow the management teams to focus on the fundamentals and over time, um, whether that's a quarter, six months, or two years down
the road, it will be better for investors. Thank you very much for spending time with us. Anthony Young is medals and mining analysts for mcquarie, speaking about ALCA. They will be reporting earnings after the close of trading today. This is taking Stock. I'm pim Fox, my co host Kathleen Hayes, and this is Bloomberg. Brooklyn is exploding. Ellen Freudenheim joins his next she's the author of the Brooklyn Experience. I'm going to find out if there are opportunities for investors.