Here's a little brainteaser for you: If you beat your estimates after you lowered your estimates, did you beat your estimates?

In the case of giant aluminum maker Alcoa (NYSE:AA), while the company did manage to surpass the estimates management gave when it warned about earnings last month, the results were still well shy of the initial Wall Street expectation.

For the company's third quarter, revenue rose about 13% while income from continuing operations was essentially flat. While the company saw good demand from aerospace and truck manufacturers, averaged realized prices were still up only about 5% over last year's level. What's more, costs continue to rise. From natural gas to resins to caustic soda, pretty much all of the inputs that the company needs are more expensive -- to the tune of almost $200 million per quarter in extra costs so far this year.

Unfortunately for basic metals fans, I don't see things getting a lot better any time soon. China continues to produce copious amounts of aluminum, which is keeping a lid on price increases. On the other hand, we all know that natural gas and chemicals have seen high prices and even occasional shortages.

For Alcoa, this quarter's results are a bit misleading, since the company had an unusually low tax rate. Worse yet, this quarter didn't include the impacts of the hurricanes; it's very likely that there will be even higher costs next quarter as a result. While progress is being made on efficiency and cost-reduction initiatives, it's tough to save your way into prosperity, and I would expect that these moves will take time to really make an impact.

Given the circumstances, I don't see a compelling reason to own Alcoa right now. Aluminum demand may be stable, but that doesn't necessarily mean big profits for Alcoa or Canada's Alcan (NYSE:AL). While aggressive investors may want to look at Aluminum Company of China (NYSE:ACH), were I to want exposure to the basic metals industry, I'd probably pick a diversified producer like Rio Tinto (NYSE:RTP) or BHPBilliton (NYSE:BHP) first.

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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).