Alcoa Inc. (NYSE: AA) reported its third-quarter financial results after the markets closed Thursday, on the heels of its announcement of a company breakup. Earnings were not up to snuff, according to analysts, but these results could also be reflecting a huge mistake that Alcoa has made in choosing to split up.

Alcoa kicked off earnings season with $0.07 in earnings per share (EPS) on $5.6 billion in revenue, compared to consensus estimates from Thomson Reuters of $0.14 in EPS on revenue of $5.68 billion. In the same period of the previous year, Alcoa posted EPS of $0.31 and $6.24 billion in revenue.

After the separation, the innovation and technology-driven value-add company will include the Global Rolled Products, Engineered Products and Solutions and Transportation and Construction Solutions units. In the third quarter, these combined business segments reported revenue of $3.4 billion, after tax operating income (ATOI) of $257 million and adjusted earnings before interest, tax, depreciation and amortization (EBITDA) of $508 million.

Also to consider after the separation, the upstream company will include five strong business units that today make up Global Primary Products – Bauxite, Alumina, Aluminum, Casting and Energy. In the third quarter, the combined upstream businesses reported revenue of $2.2 billion and ATOI of $153 million.

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As much as Alcoa and CEO Klaus Kleinfeld want everyone to accept that what Alcoa calls the upstream business is sound and on a growth path, the reality is a little more complicated. In an interview with CNBC, Kleinfeld noted that the company has reshaped its upstream business over the past few years, closing or selling off mining properties and smelters, and that it has moved its production costs down the cost curve, in addition to increasing its sales in the higher-priced spot market.

In the company’s value-add business, Kleinfeld sees continued growth in the North American auto market and a growing presence in aerospace. And while it is true that new car sales are strong right now, projected sales out through 2017 or 2018 indicate that either 2016 or 2017 will be the peak year for new car sales.

As two companies, one with promising if uncertain growth prospects and the other at the whim of the commodities market, it appears that Alcoa is dividing itself into a high-risk commodity business that will get no help from the value-add business.

In order for the separation to pay off for existing Alcoa shareholders, the commodity-based business is going to have to continue to rein in costs, probably shed more assets and hope that commodity prices don’t continue to slide. If everything works out as Alcoa’s management reckons it will, this could happen. If not, though, the upstream business will be adrift on its own without the life-preserver of the value-add business.

Unless the value-add business doubles, it cannot make up for the loss to shareholders of the upstream business. Like we said, this breakup could be a massive mistake.

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Shares of Alcoa were down 5% at $10.46 Friday morning. The stock has a consensus analyst price target of $12.92 and a 52-week trading range of $7.97 to $17.75.

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