Alcoa starts earnings season and disappoints on revenues

European markets are broadly flat this morning after yesterday's news on the Greek bail out by the Euro zone countries.

After the close last night, aluminium producer Alcoa (AA) kicked off the U.S. quarter one earnings season with a loss of $201 million, or 20 cents a share and a profit of $10 cents a share excluding exceptionals which was in line with expectations. In the same quarter in 2009, Alcoa reported a loss of $497 million,  59 cents a share. However, revenue came in worse than expected at $4.9 billion versus $4.15 billion a year ago but below estimates of $5.24 billion.

Alcoa CEO Klaus Kleinfeld said "Our markets are gradually improving and both policy trends and consumer sentiment bode well for aluminum demand," he said, citing the new U.S. fuel-efficiency and emissions regulations for vehicles. "In addition, a growing number of customers are requesting sustainable products. Factors like these play to aluminum's superior advantages as a light, strong, versatile and infinitely recyclable material."

This may be the pattern of this earnings season with companies meeting expectations on the bottom line through cost cutting. The challenge is going to be driving top line revenues and Alcoa's results from Q1 show that this remains a significant hurdle despite the signs of the global economic recovery.