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Pro Trader: Alcoa Results Show Global Recovery on Track

On Monday market pros parsed through results from Alcoa attempting to get a handle on their earnings release.

”It’s a buffet,” says Fast trader Brian Kelly. “They had good revenues but they only met expectations and lowered forecasts because of raw material costs.”

By the numbers, net earnings were $322 million, or 28 cents per share, compared with $136 million, or 13 cents per share in the same quarter of 2010, Income from continuing operations, excluding one-time items, was 32 cents a share.

Also, the company said demand for aluminum remained strong.

However, in a sign of pressure on profit margins, income from continuing operations before taxes was 7.9% of sales in the latest quarter, down from 8.4% in the first quarter.

But dig down into the results, and trader Brian Kelly thinks you'll find a few important nuggets about the global recovery - and they're bullish.

“Results show airline demand being good,” he says, “ as well as car demand and demand for truck bodies – that says the global recovery is still on track.”

Although he thinks Aloca is fairly valued, if you’re looking for a trade Guy Adami suggests playing the strong airline demand with a long position in Boeing . “Around $71 I’d look at this stock ahead of their earnings.”

Trader Karen Finerman isn’t so sure that investors should extrapolate too much from Alcoa results. If you’re looking for a bellwether, she says wait for JPMorgan, they’ll speak volumes about the banking sector.




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Trader disclosure: On July 11, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Karabell owns (GOOG); Karabell owns (GS); Karabell owns (GE); Karabell owns (AAPL); Adami owns (AGU); Adami owns (C); Adami owns (GS); Adami owns (MSFT); Adami owns (NUE); Adami owns (BTU); Adami owns (INTC); Pete Najarian owns (AAPL); Pete Najarian owns (ACI); Pete Najarian owns (C) ; Pete Najarian owns (F) bonds; Pete Najarian owns (MS); Pete Najarian owns (MOS); Pete Najarian owns (MRVL); Pete Najarian owns (PFE); Pete Najarian owns (GE); Finerman's Firm And Finerman Own (AAPL); Finerman's Firm Owns (BAC) Leap, Finerman owns (BAC); Finerman's Firm Owns (JPM) Leap, Finerman owns (JPM); Finerman's Firm owns (CMI), Finnerman is short (CMI); Finerman's firm owns (CAT) calls; Finerman's Firm Is Short (SPY); Finerman's Firm Is Long S&P 500 Puts; Finerman's Firm Is Long Russell 2000 Puts

Brian Kelly
Accounts Managed By Brian Kelly Capital Own (KRE)
Accounts Managed By Brian Kelly Capital Own (WFC)
Accounts Managed By Brian Kelly Capital Own (ANDE)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (FCX)
Accounts Managed By Brian Kelly Capital Own (TCK)
Accounts Managed By Brian Kelly Capital Own (UGA)
Accounts Managed By Brian Kelly Capital Own (RTH)
Accounts Managed By Brian Kelly Capital Own (SLV)
Accounts Managed By Brian Kelly Capital Own (TBT)
Accounts Managed By Brian Kelly Capital Are Short the British Pound
Accounts Managed By Brian Kelly Capital Are Short the Yen

For Zachary Karabell
River Twice Capital is short (XLF)
River Twice Capital and Karabell own (BIDU)
River Twice Capital and Karabell own (POT)
River Twice Capital owns (MON)

For Dennis Gartman
Funds Managed By Dennis Gartman Are Long Gold
Funds Managed By Dennis Gartman Are Long the Australian Dollar
Funds Managed By Dennis Gartman Are Long WTI CRUDE
Funds Managed By Dennis Gartman Are Long the Canadian Dollar
Funds Managed By Dennis Gartman Are Long the Swiss Franc
Funds Managed By Dennis Gartman Are Long Corn
Funds Managed By Dennis Gartman Are Long Soybeans
Funds Managed By Dennis Gartman Are Short Brent
Funds Managed By Dennis Gartman Are Short the Yen
Funds Managed By Dennis Gartman Are Short the Euro
Funds Managed By Dennis Gartman Are Short the BRITISH POUND SILVER
Funds Managed By Dennis Gartman Are Short COPPER
Funds Managed By Dennis Gartman Are Short the S&P 500 INDEX
Funds Managed By Dennis Gartman Are Short the DOW JONES

For Mary Ann Bartels
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For Nick Bennenbroek
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