What happened

Shares of Alcoa (AA) jumped 15% in July, according to data from S&P Global Market Intelligence. The move higher came in the wake of the aluminum specialist's mid-month second-quarter earnings release.

So what

On the surface, Alcoa's Q2 results weren't all that great. Revenue was down 20% year over year. Adjusted earnings came in at a loss of $0.02 a share, compared to a loss of $0.01 per share in the previous year. Adjusted EBITDA, meanwhile, plunged 59%. It was a pretty bad quarter on an absolute basis.   

A person pouring molten aluminum

Image source: Getty Images

But, given the difficult business environment resulting from economic shutdowns due to COVID-19, Alcoa did reasonably well. In fact, analysts had been projecting that the company would post a loss of $0.36 a share. Compared to that expectation, Alcoa did great and investors reacted accordingly. That relatively strong showing was notably helped along by cost-cutting efforts and moves to strengthen the company's balance sheet, among other things.   

Now what

It wouldn't be fair to say that Alcoa is firing on all cylinders today, because that's just not true. However, in the second quarter management appears to have done a decent job of limiting the pain that COVID-19 has inflicted upon a great many companies (and the world more broadly). Long-term investors should be pleased by that, of course, but it's important to remember that the hard times aren't yet over.