Slightly disappointing earnings

Alcoa, alias the Aluminum Corporation of America, is traditionally the first major corporation to report its earnings. In the fourth quarter the Company lost $277 million despite the fact that in 2009 they massively restructured, laid off thousands of employees, idled plants, cut dividends and reduced new investments in the business. Additionally, the company’s sales were down across their many business lines. Just yesterday in my guide to the fourth quarter businesses actually growing their revenues and not just their profits was my #1 concern for this earnings season. So it is safe to say that the fourth quarter earnings season is likely to be a little rockier than analysts have been predicting. In short, most businesses will probably fair ok, but not great.

This is an excellent environment in which to be a careful scrutinzer of individual businesses rather than the stock market as a whole. I would focus on businesses with unique products that are coveted by consumers; so coveted that limited funds are dedicated to the purchase of these goods and services.

Jason