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Alcoa's Aluminum Penny

|Includes:Alcoa, Inc. (AA)

  Alcoa came in at nonGAAP $0.01, five cents worse than expected.   Disappointing to say the least.  Especially when whisper numbers were as high as $0.10. (247wallst.com/2010/01/11/alcoa-making-bad-news-sound-good-aa/)  But who cares about the past.  The real question is where will earnings be in the future?

 Rather than delve into AA's report to figure out where earnings will be in another 6 months,  it's simpler to look at aluminum LME stores.  Aluminum stores are almost 5 times what they were 5 years ago. Yet, aluminum pricing is largely the same as 5 years ago, a seeming disconnect from reality. With aluminum in glut mode, you've got to wonder where AA's next penny will come from.



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Disclosure: no position

Stocks: AA