Alcoa Kicks Off Q2 Earnings Season in Fine Not-As-Bad-As-Expected Form
Per custom, aluminum giant Alcoa kicked off earnings season today, reporting a third straight quarter of losses -- as expected -- but reported not-as-bad-as-expected revenue and profit.
For the second quarter, Alcoa had a loss of $454 million on revenue of $4.24 billion.
That revenue figure is down a whopping 41 percent from the second quarter of 2008, but analysts expected it to come in at $3.93 billion.
Excluding one-time charges, Alcoa reported a loss of 38 cents per share. Wall Street was expecting 26 cents.
So what does this mean?
It means global demand for industrials, like aluminum, continues to slump and is not improving. Its rate of decline may be slowing, but that's not a recovery.
It also means that Wall Street traders may take some cheer, hoping that the second-quarter earnings of other major industrials, which will follow in coming days, will likewise be at least not-as-bad-as-expected.
The stock markets roared up more than 35 percent from their early-March bottom until they started going sideways then declining in June. These second-quarter earnings will be scrutinized to see if they correlate with that market spike or dispute it.
Shares of Alcoa jumped more than 6 percent in after-hours trading, a good portent for the market opening tomorrow.
Just remember: These markets are still skittish and there are increasing doubts as to the efficacy of this recovery. So Alcoa's pop may be short-lived. One or two worse-than-expected earnings reports over the coming days may sink the markets.
July 8, 2009; 5:25 PM ET
Categories: The Ticker | Tags: Alcoa, earnings
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