Alcoa (AA)

Their most profitable plant is laying off 145 workers due to lack of business

Alcoa Inc. (AA) posted its second consecutive quarterly loss, $497 million (or 61 cents a share) but saw its stock value rise as analysts cheered the company’s cost-cutting measures. Chief Executive Officer Klaus Kleinfeld said its end markets have shown signs of bottoming or stabilizing, Reuters reported.

Dividends are hot right now. Income-dependant shareholders will drop this stock like a ton of, umm Aluminum.

The completion of several expansion projects that Alcoa is currently pursuing may coincide with a downturn in the aluminum industry’s cycle.

Alcoa’s primary metal profit margins will suffer because of growing energy costs and exposure to fluctuating spot aluminum prices.

Nearly 2/3's of Alcoa's North American revenue is derived from the auto, paper/packaging, and construction industries. The ability of these industries to contribute to Alcoa's revenue was fueled by unsustainable debt accumulation at both the consumer and corporate level. It may be many years before these three industries recover to pre-recession levels and are able to fuel demand for aluminum products.