Alcoa Launches Earnings Season With A Whimper

Tyler Durden's picture


You've heard the CEO's oracular outlook; you've read the press-release; you've seen Maria Bartiromo flush and the algos stymied in after-hours trading. Now here are the facts:

  • Free Cash Flow: Q3 -$39MM
  • Adjusted EBITDA: Q3 $282mm, down 45% from Q2
  • Adjusted EBITDA: Q3 2011: $821 MM; Q2 2012: $ 517 MM; Q3 2013: $282 MM
  • Adjusted EBITDA Margin Changes: Q3 2011: 12.8%;  Q2 2012: 8.7%; Q3 2012 4.8%
  • Total debt: $9,524; Net debt: $8,092; LTM EBITDA $1,875 million; Total Leverage: 5.1x; Net Leverage: 4.3x

and here is the correlation:


(h/t @Not_Jim_Cramer)

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Tue, 10/09/2012 - 16:48 | 2872526 Meesohaawnee
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Tue, 10/09/2012 - 16:53 | 2872547 slaughterer
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In all seriousness, did ANYONE ever really believe in Alcoa's 7% global aluminum demand increase?  

Tue, 10/09/2012 - 16:55 | 2872553 Cursive
Cursive's picture


Klaus pulled a Schrodinger.  Said auto demand was a big positive, but light truck sales are showing stress.

Tue, 10/09/2012 - 16:59 | 2872568 fonzannoon
fonzannoon's picture

Where is Jack Welch on this?

Tue, 10/09/2012 - 17:01 | 2872574 JohnG
JohnG's picture


Tue, 10/09/2012 - 19:40 | 2873005 The Alarmist
The Alarmist's picture

This is how the world ends ... not with a bang, but a whimper.

Tue, 10/09/2012 - 17:01 | 2872575 JPM Hater001
JPM Hater001's picture

I just called and he said he's still recycling cans...has no idea what's up...

Tue, 10/09/2012 - 17:05 | 2872585 azzhatter
azzhatter's picture

saw Jack this afternoon with a garbage bag of cans riding his bicycle to the recycle center. Apparently he's an enviromentalist or he's broke

Tue, 10/09/2012 - 23:30 | 2873397 Tommy Gunner
Tommy Gunner's picture

The bigger question is doesn't Jack Welch look a dried up evil wizard - with the voice to match?   And how does his wife fuck that wrinkled bald piece of shit without cringing?

I have a theory about Jack and Suzie - Jack acts like the tough guy on TV (the runt couldn't beat up a little girl) - but behind the scenes he is a SEVERE deviant.

I suspect he cut a deal with young Suzie and pays her BIG dollars no whammies to strap on the biggest cock he can possibly find on  and roger him really, really fast and hard.

And scrawny Jack with the arse like a soft back of saggy shit squeels great yelps of joy in that high pitched voice of his. 

Suzie - you deserve every single Goochi and Lou Vitton bag that Jack buys for you - you are a very very good whore.

Tue, 10/09/2012 - 16:58 | 2872562 Stoploss
Stoploss's picture


It's working flawlessly!!

You little margin eviscerator you!

Tue, 10/09/2012 - 17:26 | 2872635 walküre
walküre's picture

.. and queue the headline across all tickers around the world ..

Alcoa beat estimates

Well, with only 7.8% unemployment of course they did!

Tue, 10/09/2012 - 23:32 | 2873490 Tommy Gunner
Tommy Gunner's picture


Thank you ZH for posting the truth - MSM is trying to jump start this bitch with CONfidence stories... problem is the bitch is dead.  Ain't nothing going to help bring her back.

What?  You are tapped out and can't consume - no worries - how about a car loan with no payments?  Or how about you show us your pulse and we loan you thousands to go back to school and come off the job stats to make us look better - or better still, fake a limp and we'll give you disability and take you off the job stats...

We are SO absolutely FUCKED.

Tue, 10/09/2012 - 19:41 | 2873009 billsykes
billsykes's picture

it a typical seasonal oversupply issue/result- winter= less building= less Steel, aluminium, scrap. combine with oversupply.

Tue, 10/09/2012 - 19:59 | 2873053 billsykes
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sorry dbl post

Tue, 10/09/2012 - 16:49 | 2872529 ZippyBananaPants
ZippyBananaPants's picture

Did Maria leave a steamer?

Tue, 10/09/2012 - 16:49 | 2872530 Temporalist
Temporalist's picture

You can't eat aluminum

Tue, 10/09/2012 - 17:00 | 2872572 q99x2
q99x2's picture

It could mean the return of goat herding.

Tue, 10/09/2012 - 17:01 | 2872577 CPL
CPL's picture

"Shouldn't take more than five buck to dig up"

Tue, 10/09/2012 - 17:14 | 2872601 LeisureSmith
LeisureSmith's picture

But you can eat by-products of Aluminium smelting....It's even encouraged.

Tue, 10/09/2012 - 17:49 | 2872689 SokPOTUS
SokPOTUS's picture

Good thing; as this is definitely a 'He Who Smelt It" earnings report...

Tue, 10/09/2012 - 16:50 | 2872533 ShrNfr
ShrNfr's picture

Gotta love the one time (every earnings report) charges. People still fall for it though. Without the extraordinary charges that we put up every earnings report, AA would have earned 3 cents. As it was, we lost 12. Carry on.

Tue, 10/09/2012 - 16:52 | 2872542 Cursive
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13 cent loss turns into a 3 cent gain "ex-tems."  Why Mario didn't ask about new contract pricing?

Tue, 10/09/2012 - 16:53 | 2872544 fonzannoon
fonzannoon's picture

Earnings don't matter. Go long accounting gimmicks.

Tue, 10/09/2012 - 17:04 | 2872581 mayhem_korner
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What are these "earnings" you speak of?

Tue, 10/09/2012 - 17:09 | 2872591 ParkAveFlasher
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Long hat rabbits, sleeve pigeons

Tue, 10/09/2012 - 17:18 | 2872605 Dr. Engali
Dr. Engali's picture

I think you're wrong Fonz. Qe3 was baked in and there's limited market upside. We may churn here for a while as the fed's resolve is tested ,but my guess is we are headed south.

Of course if Ben decides to do a surprise QE all bets are off.

Tue, 10/09/2012 - 17:31 | 2872650 fonzannoon
fonzannoon's picture

you are prob right. i would not be surprised at all though if this sets up some ridiculous end of year rally, but i think u are correct. by the way...surprise that actually possible from here on out?

Tue, 10/09/2012 - 17:45 | 2872680 RSloane
RSloane's picture

If the Feds do another 'unusual' QE move in the middle of QEi I would think the markets would initially rally then be in full panic mode as all of the  artifical lift that the Fed can manufacture has already worked its way through the system. I agree with you Doc, I too think we are headed south.  

Tue, 10/09/2012 - 17:48 | 2872685 fonzannoon
fonzannoon's picture

When the twist ends and the fed goes for another 45 bil full blown LSAP in January is that a surprise or is that already getting baked in on the way down.

When the market starts really heading down and the dollar turns down at the same time and yields start climbing (and monkeys start flying out of my ass) and metals start roaring...I will become very interested.

Tue, 10/09/2012 - 16:54 | 2872545 Diesel Seven
Diesel Seven's picture

Ooops . . . declining margins look scary--more head count reductions coming? They need to use more aluminum in iphones and lobby for a ban on plastic and glass beverage containers--that'll fix it.

Tue, 10/09/2012 - 17:07 | 2872580 mayhem_korner
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Layoffs are only permissible if those cut go immediately to the "stopped searching for work" pool.  Do not pass Go; do not collect $200 unemployment.

Tue, 10/09/2012 - 17:50 | 2872697 SokPOTUS
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Ha.  The Disappeared.  Don't give 'em any ideas...

Tue, 10/09/2012 - 16:55 | 2872554 Quinvarius
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As long as they are only still whimpering at the same volume level as they have been for the last decade...the thesis is bullish.

Tue, 10/09/2012 - 16:58 | 2872565 Duke of Con Dao
Tue, 10/09/2012 - 17:08 | 2872589 ParkAveFlasher
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Tue, 10/09/2012 - 17:13 | 2872593 Ness.
Ness.'s picture

Give a rest please.  We get it.  No need to continually post the same link in every.. single.. post.  It makes you look unstable.

Tue, 10/09/2012 - 17:16 | 2872603 Rainman
Rainman's picture

Might be worth an out of the money long WWIII bet !..... BTFD !!

Tue, 10/09/2012 - 17:22 | 2872612 yogibear
yogibear's picture

More demand for aluminum tin-foil hats needed!

Tue, 10/09/2012 - 17:23 | 2872624 ShrNfr
ShrNfr's picture

Foiled again are you? Personally I prefer epee. He who gets the touch first wins. So don't lose your touch with words.

Tue, 10/09/2012 - 17:20 | 2872615 walküre
walküre's picture

EBITDA margin down to just 4.8% in the production of Aluminum?

Go recycling.

Tue, 10/09/2012 - 17:26 | 2872632 davidsmith
davidsmith's picture

This report is why Romney will win.  Don't want your Alcoa stock to collapse?  Need more defense spending!!


And that's what you're going to get.


And that's why Romney is going to win.

Tue, 10/09/2012 - 17:38 | 2872662 walküre
walküre's picture

Romney DID say his plan is to create one million jobs per year in America. When Obama promised to create jobs, the Repubs were all over that and pointing out that government doesn't create jobs. It's one of Rush Limbaugh's pet peeves. Now that Romney talks jobs on the campaign trail, it is all ok. Maybe the jobs will be created in the military? Cannon fodder anyone?

However, there is no money that government could spend to either go to war or "create" jobs.

Fiscall cliff and all that REALITY which we're approaching FAST.

Tue, 10/09/2012 - 17:43 | 2872677 davidsmith
davidsmith's picture

Baloney.  There's $40 trillion more in QE to loot from American homeowners before America collapses.  We're going to loot it all, and the underclass is going to have to be satisfied with defense-related jobs.  How do you think Reagan won?  The minute he started talking about ramping up defense spending, everyone knew he would win.  Romney is channeling Reagan (did you see the debate? the tone of voice? the hand movements?--all pure Reagan).  He'll get 55% of the vote.  He'll surprise everyone.  Prince Barack simply can't be bothered any more.  Neither could Prince Jimmy.

Tue, 10/09/2012 - 17:52 | 2872711 CrashisOptimistic
CrashisOptimistic's picture

Romney's plan, to win, is so far being executed well -- and that is to not be Obama.  Obama had his chance and has failed.  

Romney is best advised not to offer much in the way of specific plans.  That's not how you defeat a failed incumbent.  You defeat one by simply pointing out the failure over and over and saying "I will do better".

That's how one wins.

Tue, 10/09/2012 - 17:58 | 2872721 davidsmith
davidsmith's picture

I don't think Reagan EVER said "I will do better" or anything even approaching it.  He said he would spend a shitload more on defense.  And THAT is how he won.  Let's hear anyone contradict me.

Tue, 10/09/2012 - 17:59 | 2872727 davidsmith
Tue, 10/09/2012 - 18:10 | 2872750 death_to_fed_tyranny
death_to_fed_tyranny's picture

The Gubermint needs to add more fluoride to the water. It will help with "cavities" and help Alcoa. Let us increase it 10 fold for children and Merica. Fuck Yeah!

Tue, 10/09/2012 - 18:44 | 2872848 John Law Lives
John Law Lives's picture

There are few things more amusing than reading spin jobs from the MSM re. corporate earnings.

"Alcoa Beats Expectations..."

Alcoa announced a quarterly EPS of $0.03 vs. a "projected" EPS of $0.00.  Too bad that analysts were projecting an EPS of $0.07 some 90 days ago before they steadily lowered them to $0.00... before Aloca "beat" EPS.

This is the same ole BS that goes on every quarter from the MSM.

100% FUBAR.


Tue, 10/09/2012 - 18:50 | 2872875 chump666
chump666's picture

lol stimulus what a f*cking joke

Aloca is dreaming that China will go all out again, with oil bid over 90??  Which essentially means that global riots (oil inflation/stagflation) are ensured and China will look for a distraction. Namely Japan.

We take the market pain and adapt.

F*ck the Fed and Obama and that idiot Romney.

...and f*ck Europe.

Thank you.

Tue, 10/09/2012 - 20:08 | 2873066 orangegeek
orangegeek's picture

Let's see if the bots/algos can spin this one.  Nikkei just opened (8p EST) and is down 1.3% - not bad for 5 minutes.


And the next leg down - primary wave 3 - looks ready to unfold on the SP500.

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