Another quarter has rolled by, and nothing much has changed for giant American aluminum producer Alcoa (NYSE:AA). That's not a good thing. 2005 wasn't exactly a banner year for Alcoa; the stock rallied hard at year-end to finish basically flat for the year.

In its fiscal fourth-quarter results, Alcoa reported revenue growth in excess of 11%. However, persistently high operating costs muted the corresponding growth in operating income to just about 6%. Income from continuing operations -- which is similar to operating income, but includes items like restructuring, interest expense, and "other" income -- actually dropped about 15%, and net income fell a little harder, down about 16.5%.

If you follow materials companies in general, and/or aluminum companies in particular, this will seem very familiar to you. Production was good -- the company shipped almost 10% more metric tons of aluminum products. Pricing was good -- averaged realized prices were up 12%, and aluminum prices in general are at their highest level in about 17 years. The costs? Not so good.

Aluminum is a very power-intensive metal to produce, and high energy costs have done significant damage to the profitability of producers like Alcoa. Likewise, costs of caustic soda and other necessary inputs have further crimped profitability.

All considered, then, it's a weird sort of environment -- China is gobbling up aluminum, aerospace companies like Boeing (NYSE:BA) and Motley Fool Stock Advisor pick Embraer (NYSE:ERJ) are seeing revivals, commercial construction is picking up, and many manufacturers are still looking to swap aluminum for steel. It's been a boom time for anyone holding aluminum futures contracts, yet the aluminum companies are having a tough time making money.

I've said my bit on Alcoa before, but it merits repeating: I believe in a cyclical upswing in aluminum, and I want to like Alcoa, but the company's performance thus far does not merit an investment. If you feel like you have to invest in the aluminum boom, I suppose you could consider Aluminum Corporation of China (NYSE:ACH) or Century Aluminum (NASDAQ:CENX). For now, though, I'd be careful about Alcoa -- it cost pressures don't seem to have eased up yet, and the return on capital is far from spectacular.

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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).