International Business review

International Business review - International Business...

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International Business review U.S. Alcoa Alcoa kicked off the first quarter's earnings season on a a bittersweet note. The decreasing demand coming from global economic recession and decreasing aluminum prices were much stronger than expected leading Alcoa to a 487 million dollar first quarter loss! Sales fell by nearly half which was not expected at all. But there was some good news, everyone knows that the economy is bad and therefore the company semi expected to be down, although not 471 million, they were still preparing for losses. Because of this people in Alcoa and their shareholders are looking for anything that would possibly stabilize the economy or even just a certainty of what will happen. Alcoa although down, was certainly not out. The next day they brought good news and hope for everyone involved. Klaus Kleinfeld , Alcoa's chief executive, was very positive. "We also see both near-term and long-term catalysts that should improve the prospects for the aluminum industry" Kleinfeld said. At least for the near-term, he cited stimulus programs targeting infrastructure and energy efficiency, which he said will create a demand for the unique characteristics of aluminum. This will hopefully generate some quick cash flow in the near future. Kleinfeld also talked about ways that aluminum will eventually become steady again in the long term, one thing he cited was the “global megatrends” and the “huge population boom” in the world.
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But overall the second quarter, although it won’t be as bad, is expected to be weak as well as the rest of the year. This is do to the decreasing consumption of aluminum as well as the reduction in
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This note was uploaded on 03/18/2010 for the course BA 111111 taught by Professor Prof.johnson during the Spring '10 term at Aarhus Universitet.

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International Business review - International Business...

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