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Drilling down, Cramer sees many Alcoa positives

Thursday, 9 Jan 2014 | 6:14 PM ET
Alcoa CEO: Aerospace business looks good
Thursday, 9 Jan 2014 | 6:15 PM ET
Klaus Kleinfeld, Alcoa chairman and CEO, tells Mad Money host Jim Cramer there is a lot of demand in Southeast Asia and the Middle East for its Aerospace business. U.S automotive production in North America continues to go up, Kleinfeld adds.

(Click for video linked to a searchable transcript of this Mad Money segment)

For valuable insights on the global economy Jim Cramer always tells investors to pay close attention to commentary from Alcoa.

"This big aluminum maker is tied into some very important end markets," Cramer explained. "And CEO Klaus Kleinfeld always provides incredible insights."

On Thursday after Alcoa released earnings, Cramer spoke with Kelinfeld one-on-one about the quarter as well as his outlook for some of Alcoa's key divisions.

Here's a synopsis of what was said:

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Aerospace – Kleinfeld said the business, "looks good – we have just had a November that's been unbelievable." And he noted the sector continues to experience "a lot of demand from Southeast Asia and the Middle East."

Automotive – "North America looks very, very good, Kleinfeld noted. "Production continues to go up – we still see pent up demand."

Commercial building and construction – "In Q4 we started to see some early green shoots," Kleinfeld noted. Also he added that new housing starts pointed in a positive direction.

China – Although Kleinfeld conceded that China's growth would likely slow a little in 2014, he felt China's growth was a relative metric. That is, growth had been white hot. "I still think China will grow by more than 7%. That's quite nice growth," Kleinfeld said.

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Kleinfeld's comments suggest that many of Cramer's favorite themes remain very much in play. "Sellers may have sent the stock down in after-hours trading, but after drilling down below the headline numbers, there are some real positives here."

Looking at the headline numbers, Alcoa posted fourth-quarter earnings excluding items of 4 cents per share, down from 6 cents a share in the year-earlier period. Revenue dropped to $5.59 billion from $5.90 billion a year earlier.

Analysts had expected the company to report earnings excluding items of 6 cents a share on $5.34 billion in revenue, according to a consensus estimate from Thomson Reuters.


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