Thursday, July 09, 2009

Alcoa Alcoa Alcoa 49% Drop In Commodity Prices

Alcoa (AA) finally reported and kicked off earnings season. The market seems relieved that its not as bad as feared. But I am just a simple guy looking at some operating basics. This is what I see. Klaus Kleinfeld, Alcoa President and CEO reports revenues of $4.2 billion, up 2% from 1Q09, but down 41% from 2Q08 on economic downturn and 49% drop in metal price. OK then you scrutinize the balance sheet that they provided and you see customer receivables down just 14% and inventories down just 23%. Seems like they are struggling (understandable but you have to point it out). Clients are stretching them out.