Alcoa reported earnings of 11 cents per share, beating not only analysts' consensus amount of eight cents, but also beating the whisper number of 10 cents. Investors were still not impressed based on the shares falling below the closing price in after-hours trading. Unfortunately, without an improving economy, the shares may have more to fall.
Investors instead focused on shrinking revenue and expected lower aluminum prices. Net income was $149 million, a marked improvement from the loss produced in the same quarter last year. Still, not overly impressive for a company with a market cap of nearly $9 billion.
Based on current earnings with Monday's closing price, Alcoa is continues to trade at a relatively high price to earnings multiple above 20. For comparison, the S&P 500 ETF (SPY) trades at an average multiple of 18, and bellwether General Electric's (GE - Get Report) P/E is 17.9, but pays a 3.3% dividend, more than double that of Alcoa.The Street's Richard Saintvilus thoroughly spelled it out in his earnings preview article
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