NEW YORK (
(AA - Get Report)
kicks off the earnings season on Tuesday but is it really relevant anymore Jim? I mean, we feel like we talk about Alcoa but they've had so many revenue misses in a row. Why do we care about Alcoa?
Because there's two Alcoas. There's the Alcoa that goes into
iPads, the back of an iPad. An Alcoa that goes into construction, it's a very big construction company. Alcoa puts a huge amount of screws in planes, everybody's plane, aerospace. There's turbine business, natural gas. There's autos, there's trucks. So you have this big panoply of end markets, but then there's the business of the commodity. The commodity is what's kept them down. No matter what you do you can't get the cost low enough. They did close some Italian and Spanish factories and that could help alleviate some of the glut. I know that it's a disappointing stock - over and over again.
I've got a piece I'm working on about how people should forgive and that maybe if they fail and Alcoa sells off it looks good. Look at the way
bounced back and
bounced back and
bounced back, Alcoa might be one to watch because if we get a second half worldwide recovery, Alcoa's going to do better.
Analysts don't have very positive feelings towards Alcoa right now.
Number's too high.
The average earnings estimate number has been coming down.
Still probably too high.
Are they going to set that bar really low and then be able to get it?
They've set it lower and lower and lower and it's never mattered.
It's like the limbo.
It's just never mattered so I don't know if it's going to matter this time. I do want to point out that there is value creation. There was a ratings downgrade, a questionable downgrade putting it on watch. I think Alcoa's balance sheet is getting better, not worse. So, I like what Klaus Kleinfeld, the CEO, is doing. I don't want to give up on Alcoa. I think it's a name that Stephanie Link and I kicked around again. We've been cursed in it so we didn't go back in it.