NEW YORK (TheStreet) -- Alcoa (AA) reported earnings Monday and some of the media all but gave the aluminum giant a supporting lift, claiming they ran up the score. Bloomberg, for example, ran this headline: "Alcoa Beats Estimates As Carmakers Buy More Aluminum."
Got that? Alcoa beat estimates -- without any caveats. The lead echoed this implication that it was a meaningful beat:
Alcoa, the largest U.S. aluminum producer, reported second-quarter earnings and revenue that beat analysts' estimates after an increase in orders from the auto and aerospace industries.
The Associated Press went with a more fitting headline: "Alcoa's Revenue Falls 9% on Weak Aluminum Prices." Moreover, they told us right in the lead that results were "slightly" ahead of analysts' expectations.
Profit was 6 cents a share, vs. a 5-cent consensus. Revenue fell 9.4% to $5.96 billion, edging out the expected $5.81 billion.Granted: a technical beat is better than none. But if we're really talking a beat in name only, the media should draw the distinction. Here's the other important deal: Analysts had slashed and burned Alcoa estimates in recent weeks. The fact that Alcoa inched out a beat of wildly reduced expectations means more that analysts didn't have their scale calibrated right than business has reversed course and is thriving. Bloomberg did not deign to mention that; the Associated Press did, prominently. Don't forget it: Not all beats are created equally. At the time of publication, Fuchs had no positions in any of the stocks mentioned in this column.
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