In some ways, it’s much like being the first child alphabetically in the class; his or her name always gets called first, and then, that child can relax while the teacher calls the rest of the roll. So, it is with the first company to report during earnings season, and with a stock symbol of "AA", it’s Alcoa’s blessing – or curse, as the case may be – to lead things off and provide some direction to the market and the economy for weeks to come.
At the beginning of this week, Alcoa reported quarterly net income of $149 million U.S., or 13 cents a share, to begin fiscal 2013. Now, that compares to a figure of $242 million U.S., or 21 cents a share, in the first quarter of 2012.
Adjusted Earnings Before Interest, Taxes, Depreciation and Amortization in first quarter 2013 grew to $690 million U.S., an increase of $66 million over first quarter 2012.
First-quarter 2013 revenue came in at $5.8 billion U.S, a decrease of 3% from first quarter 2012, largely on lower London Metal Exchange aluminum prices and the impact of curtailments in Alcoa’s European primary metals production.
Alcoa, the world’s leading producer of primary and fabricated aluminum, boasts that its innovation has been behind major milestones in the aerospace, automotive, packaging, building and construction, commercial transportation, consumer electronics, and industrial markets over the past 125 years.
However, as sharp-eyed observers of the market have pointed out, Alcoa shares are down 3.9% for the year to date, while the Dow has gained 11.6% to dizzy, record heights, and the S&P 500 has added 9.7% to similarly unprecedented levels. And Alcoa is one of the major stocks in the Dow 30.
Alcoa's stock hit a cyclical bottom in March 2009, around the same time the Dow and S&P 500. But while both market gauges have recently posted historical highs, Alcoa is 83% below its record high of $48.77 U.S. hit in the halcyon days of summer 2007.
What else those in the know point out: Alcoa is also by far the smallest stock in the Dow, with a market capitalization of $8.9 billion U.S., less than a third of the next smallest, Travelers Companies at $32 billion U.S.
Arguably, that lack of size could provide a push for removing Alcoa from the Dow, where it has enjoyed life since 1959.
The stock ended a whirlwind week for markets in general down 10 cents Friday from Thursday at $8.22 U.S., way down from its 52-week high of $10.24 U.S. set on April 12 of last year, and not that far removed from a 52-week low of $7.97, to which it fell last July.
