Alcoa sinks

Alcoa kicked off earnings season by tallying fourth-quarter net income of US$291 million, or US33 per share, on US$5.5 billion in sales, compared to a loss of US$223 million on sales of US$5.1 billion in the year-ago quarter. However, Alcoa reported unusual items that caught many off guard and left some analysts worried that the company might miss its 2004 and 2005 earnings estimates as aluminum prices slide and costs rise. The concerns weighed heavily on Alcoa stock, driving it down 8.7% to US$35.49 on heavy volume.

(Meanwhile, former Alcoa CEO and U.S. Treasury Secretary Paul O’Neill found himself in the spotlight for his depiction of President Bush as being so disengaged during cabinet meetings that he was “like a blind man in a room full of deaf people.”)

One company that’s not having problems with pricing power is Brazil’s CVRD. The world’s largest iron-ore producer settled on price increases of about 18% with its major customer Arcelor, the world’s largest steelmaker, which will buy 22 million tonnes of CVRD’s iron ore this year. CVRD closed the period down US80 at US$61.30.

Investors will now be able to trade options of Coeur d’Alene Mines on the American Exchange, with position limits of 75,000 contracts. The options will trade on the March expiration cycle, and the specialist will be Charlton Specialist Partners LLC. Coeur’s common shares slipped US29 to US$6.37.

The top-perfoming juniors included U.S. Gold, which rocketed 72% to US$1.48, and partner Canyon Resources, which climbed US32 to US$4.30. Out of 33 holes drilled so far at the partners’ El Aguila property in Mexico, 12 intersected high-grade gold values with at least 4 metres grading greater than 3.4 grams gold per tonne.