Monday, January 11, 2010

Alcoa disappoints

Alcoa (AA), Dow stock, reported a smaller net loss for Q4 & revenue shrank as higher metal prices were offset by ongoing weakness in aerospace, construction & gas turbines businesses. AA had a net loss of 28¢ per share compared with a loss $1.49 per share last year. But the quarter included 28¢ a share in special charges. Revenue fell to $5.4B from $5.6B. However, free cash flow turned positive for the first time since Q2 of 2008. AA expects key markets to improve in 2010 but they are not at historical normal levels. This is a discouraging sign for other Q4 earnings reports. In after hours trading, the stock sold off 90¢ (5%) as EPS came in below the 6¢ analysts had been looking for.

Alcoa's Quarterly Profit Trails Estimates on Higher Energy, Currency Costs

Alcoa --- 1 year

On another negative note, Japan Air Lines, a major international air carrier, has been given clearance to file for chapter II next week (an expected move). While this won't directly impact US markets, its bad debts & borrowings will hurt many around the world. Their stock in Tokyo is trading at the equivalent of 70¢. Asian markets (including Japan) are opening slightly higher but expect US markets to be weak at the open tomorrow.

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