Story Stock: Alcoa Slated to Kick-Off Next Round of Corporate Earnings

Third largest aluminum producer looks to bounce back after being dropped from the Dow Jones last year.
4:58 | 04/08/14

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Transcript for Story Stock: Alcoa Slated to Kick-Off Next Round of Corporate Earnings
I'm Michelle Franzen in New York the financial markets close on Tuesday April 8 this is story stock. Today the unofficial start of earnings season and were looking at Alcoa. Is there life after leaving the Dow here to tell us -- list -- from Yahoo! finance. Lauren -- once thought to be the Bellwether of US industries and 54 years as the Dow component then was removed from the index tell us why. So this actually a really nice comeback story but the -- -- not the kind -- all senate as you said so last September. -- actor 54 years -- out was booted it was -- along with a couple of other names along with Hewlett-Packard and Bank of America. They were all been at the time and replaced with other stocks -- -- they were underperforming so Alcoa had struggled with its stock price. I was down 7% for the year -- had been underperforming the broader market for the year. And it now is one and indexes that people look to when they say the market this is what the market did today at supposed to be reflective. The broader market and -- out -- was booted -- to its underperformance. Last September 20 yet along with the couple others that I mentioned it was replaced by Nike. And actually -- that it is done quite well this stock price is up. More than 50% since it was muted and don't care that artist which is -- just that under 10% that outperformed the Dow in that time. And Michael comeback story every likes to come back story right that's right seven months ago little kick in the pants here what's got the aluminum industries so excited. -- so there's a couple things that could be going on actually is interesting. CDC looked at -- -- at these stocks it'd been kicked out of the down what's happened and sense and actually quite a few of them have had sizable gains. So -- couple things that can could be going on one could be what is going on with the -- specifically but the other could be. Day when these companies are kicked out it's because they have under performed consistently for a while so. You know what happened if you have a low bar kind of sets things up to improve to get better there's more upside than there is downside so. That could be one of the reasons but looking at -- -- specifically Alcoa is an aluminum producer. It used to be considered an industrial Bellwether as you mentioned for the economy. Not anymore really because as you know we don't really have a manufacturing economy anymore we have a service led economy. So that's one of the issues there but also its diversify its gone more hi tech it's producing other types of metals and and other types and products and so it has -- Up from aluminum prices which have been falling stock -- risen despite the fact that aluminum has been falling. -- -- one columnist news covers -- and that I read a nice piece front am MarketWatch. With saying that this speaks to their diversification into more high tech types of products so -- give me an idea what kind of earnings reports can we expect from -- So earnings cannot after the bout which could be any minute now -- -- -- -- come out -- Atlantic medic and I tell -- expectations are not so -- -- actually lower than they -- last year so. They're expected to make for five cents as the consensus compared to eleven cents last year so they're not expected to do as well. And revenues are expected to actually fall 5% to add about five and half billion dollars or not people are looking for and this is always one name that people pay attention to because it's that kick off -- -- season this is the first. Earnings report that we'll get for for first quarter earnings which of course starts. The whole slew of companies reporting where we'll get a gauge of how the economy is doing -- how corporate earnings are dealing and again to cite them MarketWatch piece by American troops is his name -- -- -- but he made a really interesting point which is that even though Alcoa does not represent. The economy as it once did it's not that industrial -- whether anymore it does actually represent. The economy and a different way in -- -- presents and reflects -- Most US companies their reports are necessarily about US business forget American -- these are global companies international story and international picture matters justice. Alcoa is susceptible to demand for aluminum in China. That's a situation is analogous to what many companies face in a global economy and also the high tech story with them getting into more more high tech -- and innovative materials. That's a trend EC companies in the US are very focused on technology ending in high tech and also. Eight kind of big -- on aviation that we're seeing any industry that's dependent on outcome which is cars you've seen a number of car companies say. -- -- are actually using more aluminum switching from steel to aluminum in some cases. Prominently we heard that from Ford that their act -- fifty they'll use aluminum and act -- fifty's in most popular car in the country. So you know -- certainly not on the -- list but certainly still being talked about. Actually we don't have to forget about it just yet thank you so much of the Yahoo! finance thanks for joining us. You've been watching -- -- stay with For your latest headlines I'm Michelle Franzen in New York.

This transcript has been automatically generated and may not be 100% accurate.

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