It's one of the biggest mysteries on Wall Street: Why does stock in Alcoa Inc. (AA), the world's top aluminum producer, constantly disappoint investors?

The company can't seem to shake its image as an underperformer, even at a time when aluminum is at 17-year highs.

Since May 1999, when Paul O'Neill left after 12 years as chief executive to become President Bush's Treasury Secretary, Alcoa shares are down 1.9 percent. In the same time, the Dow has gained 2.1 percent and rival aluminum producer Alcan Inc.'s (AL) stock has surged 33.4 percent.

While Alcoa's revenue growth since 1999 has slightly outpaced the average of its peers on the Dow Jones Industrial average, its profit growth before one-time items has fallen short of the average for the other 29 companies in four of the six years to 2004, according to Reuters Estimates.

"Investors have an overly optimistic view of the company, but many are disenchanted as it has not performed for years," said analyst Wayne Atwell of Morgan Stanley.

"They have got to reinvent themselves and think seriously about selling their downstream businesses," he said of Alcoa's units that produce consumer products, such as Reynolds Wrap kitchen foil. In contrast, Alcan spun-off its products unit into Novelis Inc. last year.

"Alcoa has definitely demonstrated problems in the last few years, some from management, but mostly due to things outside their control," said Charles Bradford of Bradford Research/Soleil.

Asked if Wall Street has lost confidence in Alain Belda, who replaced O'Neill as CEO in 1999, he replied: "No question. But people are mistaken if they blame Belda. I know people are disturbed and think management has not done a good job, but I think there is over-optimism on both sides."

Alcoa is obviously happy with Belda, whose base salary was increased in July 2004 from $1.2 million to $1.3 million. According to a February 2005 filing with the SEC, Belda was also given a bonus for 2004 of $1.55 million.

But this week, Pittsburgh-based Alcoa reported disappointing fourth-quarter results, with a 16 percent drop in profit, even though revenue soared more than 10 percent. Canada's Alcan will not report until Feb. 7 and does not provide quarterly guidance. But the company's generic target is 15 percent annual growth in earnings per share.

"I've heard it (about Belda) and I believe there is a level of frustration with the company not being able to beat (consensus earnings) numbers," said Daniel Roling, an analyst with Merrill Lynch.

Brian Ropp, credit analyst at T. Rowe Price said he was perplexed with Alcoa.

"I am trying to figure them out, it seems like Alcoa can't get everything going in the same direction at the same time," he said.

"Aluminum prices are stronger than they have been ... but Alcoa can't translate that into real earnings."

Clearly both companies are subject to the exigencies of a cyclical industry, and recent high energy and other costs, as well as weather and labor-related crises can affect operations at any time, but their conflicting stock performances are puzzling to Wall Street analysts and observers.

Some see Alcoa as slow to adapt to changes in the metals industry landscape sparked by China's industrial revolution, or its dependence on fossil fuels in an energy-intensive industry, or its insistence on holding on to "downstream" businesses.

Such businesses stem from the earlier days of the relatively-young aluminum industry, when manufacturers had to convince customers to buy the metal and its products.

"Alcan said 'that's a bad model' and jettisoned the downstream businesses. Alcoa stuck with it and that's a mistake," said Atwell.

Analysts note Alcan has been able to build up low-cost operations by harnessing cheaper hydro-electric power in Canada.

Even though Alcoa is spending on a new smelter in Iceland, "investors tend not to like capital expenditure. Alcoa is getting no return on its capex," said Atwell. "Also aluminum has a price ceiling, even though prices have gone through the roof. So the business model plays against it."