Free Republic
Browse · Search
Topics · Post Article

Skip to comments.

Back to work - Alcoa kicks off earnings with a dose of reality
Market Watch ^ | 11January 2010 | Jim Jelter

Posted on 01/12/2010 1:16:14 AM PST by Erik Latranyi

SAN FRANCISCO (MarketWatch) -- Alcoa Inc., as is the custom, ushered in the fourth-quarter earnings season after Monday's closing bell.

For those who like to think a big aluminum company can double as a barometer for how the rest of the earnings season is likely to go, it was an ugly start.

Yes, Alcoa /quotes/comstock/13*!aa/quotes/nls/aa (AA 17.45, +0.43, +2.53%) managed to trim its losses in the fourth quarter to a mere $277 million. And sales were up, a good sign. But after stripping out all the one-time items, the company's bottom line showed a profit of only one cent a share. Wall Street was looking for five cents. See Alcoa's results.

Down went the stock. When trading resumed after-hours, investors punished it with a 5% drop, cutting its regular session advance in half.

Apart from missing estimates, analysts were not thrilled by what appears to be Alcoa's never-ending effort to get a firm grip on costs, a campaign that cost over 21,000 jobs last year and resulted in a 52% drop in capital spending.

The slashing and burning is chilling, but understandable. Alcoa, like so many other big international companies, started 2009 in the midst of an international economic crisis with absolutely no clue when they were going to hit bottom.

(Excerpt) Read more at ...

TOPICS: Business/Economy; Front Page News; Government
KEYWORDS: alcoa; aluminum; economy; q4
Sales were not truly higher, demonstrating that there is no economic rebound underway.

We have hit bottom and are treading water.

Expect more 4th quarter results like this to come.

1 posted on 01/12/2010 1:16:15 AM PST by Erik Latranyi
[ Post Reply | Private Reply | View Replies]

To: Erik Latranyi

‘Expect more 4th quarter results like this to come.’

In what year ?

2 posted on 01/12/2010 1:36:19 AM PST by Westlander (Unleash the Neutron Bomb)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Westlander

Well for Japan Inc. it’s been 20 years of 4th quarters like this...

3 posted on 01/12/2010 3:19:57 AM PST by Neidermeyer
[ Post Reply | Private Reply | To 2 | View Replies]

To: Erik Latranyi
Expect more 4th quarter results like this to come.

I think your right. Unemployment will continue to increase, but the numbers reported will be be going down, largely due to people who are just dropping off.

Real estate will be still be in a slump, likely through the rest of the year and won't increase until unemployment recovers. Estimates I've seen have placed that out for 5-6 years.

Commodity prices are increasing, largely due to the capacity and inventory being still being depleted.

The Chinese currency is likely to increase in value against the Dollar this year.

There is still a very real potential for another economic mess due to the high degree of leveraging that Private Equity has done with their portfolio firms.

All in all...treading water is as good a description as any. Unfortunately, at some point you need to actually swim to the shore.

4 posted on 01/12/2010 5:30:10 AM PST by voicereason (I Don't Need SEX...I Get Screwed By Democrats Everyday!!!)
[ Post Reply | Private Reply | To 1 | View Replies]

To: Erik Latranyi

Every time I see one of these bad news reports come along I expect the market to drop. But it doesn’t. It just keeps going up. What am I missing?

5 posted on 01/12/2010 5:38:52 AM PST by jwparkerjr
[ Post Reply | Private Reply | To 1 | View Replies]

To: jwparkerjr

The Market is a leading indicator. The NYSE already dropped over 50% from October of 2007 to March of 2009. And NASDAQ, of course, peaked in the year 2000, and has been down ever since.

Are you expecting it to drop back to the levels of 1966-1984, with a DOW of 1000 for some reason? Why? How much more dropping is the right amount of dropping for you?

6 posted on 01/12/2010 6:10:53 AM PST by Heliand
[ Post Reply | Private Reply | To 5 | View Replies]

To: Erik Latranyi

Alcoa can’t wait!

7 posted on 01/12/2010 6:41:11 AM PST by MSF BU (++)
[ Post Reply | Private Reply | To 1 | View Replies]

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794 is powered by software copyright 2000-2008 John Robinson