When all you read is gloom, turn here for a much different perspective.

Wednesday, July 8, 2009

More Silver Linings In Alcoa Aluminum

You may recall that the first two weeks of Q1 2009's earnings season had the perma-bears calling for earnings disasters in the Q1 results. Much of the media piled on proclaiming that a "sucker rally" was in progress. We are still waiting on that proverbial next leg down...

But then the earnings season kicked off with Alcoa(AA) painting a quite rosy picture for 2009.

As we enter the Q2 earnings season, the jitters have continued in recent days. But again Alcoa kicks off the season with news that -- for them at least -- the results are better than expected. The aluminum leader said it lost 26 cents a share in the quarter, far better than the 38 cent loss consensus estimates. In after hours trading Wednesday evening Alcoa was up four percent on the good news.

Alcoa (AA) continues to claim that it's distributors are showing increased buying interest. Alcoa CEO Klaus Kleinfeld reported last month that distribution channels are now speculating that they will be unable to adequately supply a revived global demand.

Distributors "know if the green shoots turn over to become demand, they will not be able to supply." If that happens Kleinfeld said, "our distribution chain will generate this giant sucking sound of demand."

It would not be the first time we've seen aluminum's silver lining.


  1. AP published an article about ALCOA's Second Quarter Report. What a rambling piece of garbage! From one sentence to the next you couldn't tell the positive from the negative. Main stream media is a disaster right now when it comes to reporting about the economy. Thank you for your insightful analysis!

  2. GNE,

    Do you think other big companies will do better than estimates or do you think it won't be until the end of the year before we getter enough good news on earnings to push the markets higher?


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