Kicking off the earnings season for fourth quarter 2009 reports, aluminum maker Alcoa posted a Q4 2009 loss of $277 million, on lower sales and higher costs. Losses narrowed from a year ago when they were $1.2 billion dollars.
The kicker is that pro forma operating profits were 1 cent, missing analysts estimates of a 6 cent profit. Yes, the company reported a loss, but through the magic of accounting turned it into a 1 cent per share gain. The company conducted a higher number of metals trades that boosted revenue while carrying no profit. The shares plunged 6.6 percent to $16.30 in pre-market trading this morning.
There are not too many more companies reporting this week, and no big names anyway, so the markets will have to struggle with what Alcoa’s earnings mean for the economic recovery and the rest of earnings season. That is likely to put negative pressure on, but I would not expect a strong selloff just yet. We’ll keep a sharp eye on earnings as the reporting season progresses.
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Gregg D. Killoren
victoria1014
Alcoa’s Earnings Disappoint – More to Come?
Kicking off the earnings season for fourth quarter 2009 reports, aluminum maker Alcoa posted a Q4 2009 loss of $277 million, on lower sales and higher costs. Losses narrowed from a year ago when they were $1.2 billion dollars.
The kicker is that pro forma operating profits were 1 cent, missing analysts estimates of a 6 cent profit. Yes, the company reported a loss, but through the magic of accounting turned it into a 1 cent per share gain. The company conducted a higher number of metals trades that boosted revenue while carrying no profit. The shares plunged 6.6 percent to $16.30 in pre-market trading this morning.
There are not too many more companies reporting this week, and no big names anyway, so the markets will have to struggle with what Alcoa’s earnings mean for the economic recovery and the rest of earnings season. That is likely to put negative pressure on, but I would not expect a strong selloff just yet. We’ll keep a sharp eye on earnings as the reporting season progresses.
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