Alcoa's disappointment: Cost-cutting, not revenues, powered earnings

Alcoa's

(AA) earnings are just the first set of the season, as usual. And they were better than expected. The company made 4 cents a share, excluding restructuring costs. Wall St. had expected a 9-cent loss. Revenue was $4.6 billion, down 40% from last year, but still better than expectations.

What Alcoa made clear, and what's obvious from its revenue figures, is that cost cuts drove earnings. This is exactly what economists hoped not to see. When it comes to the U.S. economy beginning a recovery, the expectation, or at least hope, is that large American companies can strengthen the top line -- not just the bottom one. Economists are looking for corporate sales to improve as an indication of better GDP activity. From that standpoint, Alcoa is a disappointment.