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Here Is Why Alcoa Just "Beat" Earnings

Tyler Durden's picture


Moments ago Alcoa reported adjusted earnings (because the unadjusted earnings were a disaster) of $76 million, or $0.07, on consensus expectations of a $0.06 print. In other words, a beat. So just how did the company beat its forecast?

Here's how.

Presenting the company's Q2 EPS consensus forecast over time in the short term:

And over the longer-term:

Summarizing the above:

  • A week ago AA was expected to make over $0.07 (or today's result would have been a miss)
  • A month ago: over $0.10
  • In January: $0.17
  • Just over a year ago: $0.30
  • In January 2011: Q2 2013 EPS was supposed to be almost $0.70 cents

So: from January 2011 to today, the company's "consensus" EPS forecast was revised from just under 70 cents to $0.06 cents. But hey: at least it "beat".

By the way, here is why the EPS number is absolutely meaningless: it "excludes" $244 million in restructuring charges - something which makes a complete mockery of both an apples to apples comparison, and also the company's tax rate. Of course, not excluding the restructuring charge from Net Income would have meant a $148 million loss. But at least Alcoa provisioned $21 million in income taxes in Q2...

As for what actually mattered, here are the highlights:

  • Revenue of $5.849 billion, down 1.9% Y/Y
  • CapEx $286 million, down 1.7% Y/Y
  • Free Cash Flow $228 million, down 7.3% Y/Y

But at least the company still sees a stable and growing China, expecting Chinese aluminum demand to rise 11% in 2013 versus 9% in 2012. Well, it's not like China is undergoing an unprecedented, historic deleveraging or anything so why not...


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Mon, 07/08/2013 - 16:38 | 3731832 azzhatter
azzhatter's picture

Set the bar on the floor and even the midgets can jump over it

Mon, 07/08/2013 - 16:40 | 3731841 CClarity
CClarity's picture

"Roll" over it.  Even an infant can. Swaddled, at that!

Mon, 07/08/2013 - 16:43 | 3731855 Spider
Spider's picture

Check out AA's cash flows ... -$600 million for the 6 month period.  Only have 1.2 billion left or a little over a year at these rates.

YUCK - well at least they beat!

Mon, 07/08/2013 - 16:59 | 3731917 nope-1004
nope-1004's picture

This is new corporate America.  Forget making money, the objective now is to just fool everyone into 'believing' that you make money.


Mon, 07/08/2013 - 17:06 | 3731932 NoDebt
NoDebt's picture

And you would think with that kind of drop in expections that the share price would have been much higher a year ago, dropping as earnings and expectations dropped.  Nope.  Go pull up a 1-year.

Mon, 07/08/2013 - 17:08 | 3731939 SheepDog-One
SheepDog-One's picture

Oh no no....there will be no 'lower stock price' stuff on any DOW component!

Mon, 07/08/2013 - 17:14 | 3731958 Pladizow
Pladizow's picture

Fraud is Wall St. business model!

Mon, 07/08/2013 - 17:20 | 3731982 negative rates
negative rates's picture

I just saw um deleverage the air quality, that could cost them some blocks of aluminum to be needed.

Mon, 07/08/2013 - 17:49 | 3732076 kaiserhoff
kaiserhoff's picture

Defining deviance down.

Mon, 07/08/2013 - 19:58 | 3732471 spine001
spine001's picture

Valuation of Alcoa using CAPM and cash flow model:

$228 million, down 7.3% Y/Y ==> CF = 228 M$; growth rate = g = -7.3%; Beta = 2.14; Market Premium = 7%; 10 Year no risk yield 2.7% ==> R = Beta * 7% + 2.7% ==> R =  17.68% ==> Valuation = CF/R => 228M$/0.1768 = 1.29 billion$. This doesn't take into account the debt tax shield and/or its capital structure, but not worth going through the trouble here. Nevertheless it gives us a starting point for comparisson for AA's value as an equity only company. Oh, by the way, if you look at their balance sheet, it is supposed to be worth 40 billion, so only a relationship of 31 times the Equity only valuation... LOL. This means that a true share price would be 31 times lower than what it is today.

I am being nice since AA is not having a zero growth rate, as implied in my calculations above, but a negative one of 7%. Do you want to run the numbers for that or just a small negative growth rate for the next five years, lest say -7%, -6%, -5%, -4%, -1% and positive from then on? It'll be a lot worse.

Mon, 07/08/2013 - 19:25 | 3732332 grid-b-gone
grid-b-gone's picture

Fed money pumped into the market has caused P/E multiple expansion, or it simply takes more over-printed dollars to buy the same amount of stock as a year ago.

Knowing it's been artificially pumped would normally be a slam-dunk sell, but there's always that doubt that they can keep this up as long as the dollar is accepted as money. 


Mon, 07/08/2013 - 20:09 | 3732520 spine001
spine001's picture

Fed Money causing P/E expansion. What you say is true for many companies, but NOT for AA, the situation of AA is that of a bankrupt company or about to go bankrupt. Fed money doesn't justify the valuation of a company with a growth rate of -7%. Alcoa either restructures in a major way in the very short term or it will dissapear, its current valuation doesn't make sense unless you have a bullish world view in the short term which can't be further from reality at this moment. The market doesn't understant or is NOT FUNCTIONING AT ALL. As many ZH are saying, opinion that I share.

Mon, 07/08/2013 - 17:51 | 3732085 HardAssets
HardAssets's picture

And some thought they were in the aluminum business . . . .

actually they sell smoke & mirrors . . .

a rather crowded market on Wall Street

Mon, 07/08/2013 - 18:09 | 3732137 alfred b.
alfred b.'s picture


     Oh you mean like the Fed wants us to "just believe" that they're holding over 8k tons of gold!!


Mon, 07/08/2013 - 17:23 | 3732000 Stoploss
Stoploss's picture

Goes to show how the "efficient market" still includes a 7$ stock in the $INDX.

This whole sham is starting to get a little long in the tooth.

Fortunately, there's only thirteen more quarters to go!!

Mon, 07/08/2013 - 18:32 | 3732183 TheFourthStooge-ing
TheFourthStooge-ing's picture

Everyone is missing the point here. Can't anyone see what these results mean?

Even with such a lackluster Q2, they still managed to beat earnings. This proves that Alcoa's forecasters have supernatural powers of clairvoyance and can see into the future.

That's bound to give their stock a bit of a boost, far more than Plan B* would have accomplished.


*Channel stuffing GM dealerships

Mon, 07/08/2013 - 17:09 | 3731940 alangreedspank
alangreedspank's picture

Do a barrel roll!

Mon, 07/08/2013 - 16:46 | 3731866 Groundhog Day
Groundhog Day's picture

So when Amazon comes out with minus .10 vs minus .11 it Will trade over 350


Got it

Mon, 07/08/2013 - 17:08 | 3731938 Cursive
Cursive's picture

@Groundhog Day

There will be a new Kindle announced!  This one will have EVERYTHING that the older Kindles did not have.  And thousands of new killer apps!  And they'll lower the cost of the Prime subscription by $5 for the first month!  It's impossible for us to imagine how wonderful the world of Amazon will be in another 2 years.

Mon, 07/08/2013 - 17:21 | 3731985 prains
prains's picture

will it be able to fire depleted ukranian anti-tank rounds?

Mon, 07/08/2013 - 17:35 | 3732038 Moe Howard
Moe Howard's picture

Yes of course. Plus drone kontrol app.

Mon, 07/08/2013 - 18:01 | 3732114 prains
prains's picture

as long as it can snap chat while laser sited then the app is a go

Mon, 07/08/2013 - 19:35 | 3732378 espirit
espirit's picture

Still looking for that Mercedes control app?

Mon, 07/08/2013 - 19:57 | 3732463 Mentaliusanything
Mentaliusanything's picture

Keep looking, after all they can identify fingerprints off a " Burnt beyond all recognition" Body. Hint you need skin for that you dummies

Mon, 07/08/2013 - 18:05 | 3732126 Never One Roach
Never One Roach's picture

The stock market is much more fun then Fantasy Football !

Mon, 07/08/2013 - 16:47 | 3731875 HowardBeale
HowardBeale's picture

Only Bernanke get lower--well, maybe Paulson or Geithner, but it would be mess down there...

Mon, 07/08/2013 - 16:52 | 3731893 Agent P
Agent P's picture

Sometimes you lower the bar, and sometimes the bar lowers you.

Mon, 07/08/2013 - 17:02 | 3731922 gaoptimize
gaoptimize's picture

"Set the bar on the floor and even the midgets can jump over it"

I thought we established that here at Zerohedge, we would say "little people" instead, not to offend Jamie Dimon, Robert Reich, etc.

Mon, 07/08/2013 - 18:34 | 3732189 Parrotile
Parrotile's picture

Us "Little People" might justifiably be offended too - after all we're the class that pays taxes - and that's not just the opinion of Leona Helmsley - "Queen of Mean", but also of other American Multinationals. So much for "Ethical Business Standards" -

Mon, 07/08/2013 - 17:05 | 3731926 SheepDog-One
SheepDog-One's picture

Here, let me get in there and adjust these earnings with this here crowbar.....AH that's better! Bent out a penny beat! HOORAY!!

Mon, 07/08/2013 - 19:16 | 3732299 ImReady
ImReady's picture

A 90% reduction in earnings expectations over a 12 mo period, a better than 100% drop in actual earnings can only mean 1 thing...Buy MoooAAARRRR!

Mon, 07/08/2013 - 20:14 | 3732544 orangedrinkandchips
orangedrinkandchips's picture

isnt sawed-off PC for midgets? 

Mon, 07/08/2013 - 16:39 | 3731833 Racer
Racer's picture

Yep, that's the way to do it, push the bar down to sub basement level so it is an easy stroll across

Snake oil

Mon, 07/08/2013 - 16:39 | 3731836 francis_sawyer
francis_sawyer's picture

BLS analysts...

Mon, 07/08/2013 - 16:44 | 3731838 SheepDog-One
SheepDog-One's picture

Deftly slouching over the highjump bar now buried 3 feet underground like an obese diabetic Person of Wal*Mart in a Hover'round.

Mon, 07/08/2013 - 16:39 | 3731839 Divided States ...
Divided States of America's picture

Well at least the quality of earnings is keeping inline with the degradation of the quality of the food that we consume nowadays.

Mon, 07/08/2013 - 16:49 | 3731879 HowardBeale
HowardBeale's picture

Honey, Does this taste like aluminium to you, too?

Mon, 07/08/2013 - 17:41 | 3732054 francis_sawyer
francis_sawyer's picture

The 'Budweiser' sure does...

Mon, 07/08/2013 - 18:05 | 3732095 HardAssets
HardAssets's picture

You'd think with all the aluminum and other crap theyre constantly criss-cross spraying in the skies nowadays that they could make a decent return. 


USAF Environmental Specialist Kristen Meghan -

Mon, 07/08/2013 - 16:39 | 3731840 chubbyjjfong
chubbyjjfong's picture


Mon, 07/08/2013 - 16:40 | 3731844 nickels
nickels's picture

Need a sports analogy? This is just like Tee Ball.

Mon, 07/08/2013 - 16:41 | 3731849 CClarity
CClarity's picture

Trophies for participation.  4 Every One.

Mon, 07/08/2013 - 16:46 | 3731867 pods
pods's picture

Knocking down a single pin while bumper bowling.

Yay!, who wants a cupcake.  


Mon, 07/08/2013 - 16:47 | 3731874 McMolotov
McMolotov's picture

No one should feel left out. It's important that all corporations have high self-esteem.

Mon, 07/08/2013 - 16:51 | 3731889 ParkAveFlasher
ParkAveFlasher's picture

Corporations are people, too.  Have you hugged your corporation today?

Mon, 07/08/2013 - 16:53 | 3731900 RockyRacoon
RockyRacoon's picture

That's why there's no more dodgeball.  It wasn't the game itself that spelled its doom, it was the selection of team members.  It was too damaging to self-esteem to be selected in the last round.  Poor kids.  Now the awkward, twits, and ugly kids don't know who they are.  They are set up for future failure in trade for a little recognition today.

Mon, 07/08/2013 - 18:28 | 3732173 New_Meat
New_Meat's picture

"They are set up for future failure in trade for a little recognition today."

and are unable to see that things don't go as "expected" so they lose years of opportunities to learn and correct.

All part of the master education plan.

- Ned

Mon, 07/08/2013 - 18:35 | 3732191 LongBallsShortBrains
LongBallsShortBrains's picture

Don't give ugly people any ideas. We are tired of being the victims of discrimination, and nobody takes our minority status seriously. Every one of you discriminate against us, and it isn't fair.


Mon, 07/08/2013 - 22:39 | 3732964 brown_hornet
brown_hornet's picture

Since when are ugly people a minority?

Wed, 07/10/2013 - 16:33 | 3738901 LongBallsShortBrains
LongBallsShortBrains's picture

Since the commies started perverting words like minority. Ever wonder why women are a minority?

Mon, 07/08/2013 - 19:38 | 3732395 grid-b-gone
grid-b-gone's picture

This is why it takes an outside consulting firm to do layoffs these days. Few are psychologically prepared for rejection. The only ones who make it much past the pecking order of picking teams person-by-person are tech nerds who can leapfrog far above their grade school station in life.

Mon, 07/08/2013 - 20:30 | 3732591 azzhatter
azzhatter's picture

I always picked the girl with the biggest titties. They make good targets

Tue, 07/09/2013 - 12:30 | 3734258 dunce
dunce's picture

Zimmerman learned the hard way. His martial arts instructor said he was just soft and did not know how to throw a punch. The gun saved his life.

Tue, 07/09/2013 - 20:17 | 3735733 RockyRacoon
RockyRacoon's picture

If he could not have carried that gun he would have been at home on the sofa watching DWTS and snarfing up some Doritos -- where he belonged.  The gun got him in trouble whereas he would have been neutered without it.  And his story is not going to be an outlier when TSHTF.

Mon, 07/08/2013 - 16:41 | 3731846 rosiescenario
rosiescenario's picture

"The Company announced the review of 460,000 metric tons of smelting capacity for possible curtailment due to low metal prices and to maintain cost competitiveness. The review equates to 11 percent of Alcoa’s global smelting capacity. As part of that review, Alcoa announced it would permanently close the two Soderberg potlines at its Baie-Comeau smelter in Québec by the end of third quarter 2013. The two lines are among Alcoa’s highest-cost smelting capacity and represent 105,000 metric tons of capacity per year. In addition to the review, Alcoa announced its intent to permanently close its Fusina smelter in Italy, representing 44,000 metric tons of smelting capacity. These two closures will reduce the Company’s global smelting capacity to approximately 4.1 million metric tons with 13 percent, or 523,000 metric tons, of smelting capacity idled. "


The above from the company's press release.....


My take: we will be seeing greater currency wars.....U.S. industry (what little is left of it) needs a weaker dollar in order to compete.

Mon, 07/08/2013 - 16:50 | 3731882 rosiescenario
rosiescenario's picture

....and 10 years ago:


"We are the world's largest aluminum producer, with whole or partial ownership of 27 smelting facilities worldwide. Alcoa's consolidated capacity in 2003 was 4.0 milllion mtpy. Our largest smelter, in Baie-Comeau, Quebec, Canada, has a capacity of 438,000 metric tons per year (mtpy)."

Mon, 07/08/2013 - 18:07 | 3732131 Abi Normal
Abi Normal's picture

And to think my great, great, great granddaddy sold Alcoa his plantation on the Red River in Jamaica for peanuts (was good money back then)...they stole it from him!

Mon, 07/08/2013 - 17:27 | 3732012 walküre
walküre's picture

makes sense

they forecast 11% higher consumption in China and close facilities in Canada and Italy.

cuz China .. that's why.

we're fckd


Tue, 07/09/2013 - 12:37 | 3734283 dunce
dunce's picture

Smelting uses a lot of energy so i can see why they are in Quebec because they have a lot of cheap hydro electic power, but why are they in Italy? Did Canada raise rates far above cost forcing them to curtail production?

Mon, 07/08/2013 - 16:41 | 3731848 orangegeek
orangegeek's picture

AA is up $0.11 at $7.92.


Them's excitin' numbers!!!

Mon, 07/08/2013 - 16:58 | 3731914 Rainman
Mon, 07/08/2013 - 17:12 | 3731949 Cursive
Cursive's picture


Yeah, an AH roundtrip to $8.03 and back to under the closing price.

Mon, 07/08/2013 - 16:42 | 3731852 buzzsaw99
buzzsaw99's picture

bonus time again


Mon, 07/08/2013 - 16:48 | 3731865 SheepDog-One
SheepDog-One's picture

Fraud St rubbing it's hands together like a diabolical cartoon maniac with drool running onto their shirt....because them's GOOD NUMBERS! AND....the free money never stoppin either!


Mon, 07/08/2013 - 16:42 | 3731853 FuzzyDunlop21
FuzzyDunlop21's picture

Stopped reading at beat! BULLISH!!!!!!!

Mon, 07/08/2013 - 16:42 | 3731854 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

....but, but shirley market participants wont buy this BS....oh, wait...

Mon, 07/08/2013 - 17:22 | 3731991 buzzsaw99
Mon, 07/08/2013 - 17:44 | 3732061 francis_sawyer
francis_sawyer's picture

Just wanted you to know... We're all counting on you...

Mon, 07/08/2013 - 18:09 | 3732139 Abi Normal
Abi Normal's picture

surely you didn't just call me shirley?  but i gave you a thumbs up on the avatar!

Mon, 07/08/2013 - 16:44 | 3731860 max2205
max2205's picture

beat me off

Mon, 07/08/2013 - 18:11 | 3732142 Abi Normal
Abi Normal's picture

LOL, they beat their meat...

Mon, 07/08/2013 - 16:48 | 3731877 SheepDog-One
SheepDog-One's picture

$76 million? I didn't even know they dealt with such trivial numbers anymore on Fraud St?

Mon, 07/08/2013 - 16:53 | 3731896 ParkAveFlasher
ParkAveFlasher's picture

Potentially, Alcoa "beat" on excel rounding errors.

Mon, 07/08/2013 - 18:09 | 3732138 Never One Roach
Never One Roach's picture

Yes, but when you adjust that $76 million to Reality, it comes out to $42.34.

Mon, 07/08/2013 - 16:49 | 3731880 devo
devo's picture

Multiple expansion theory just got a pile of shit on its face. What theory goes down next?

Mon, 07/08/2013 - 16:51 | 3731886 orangedrinkandchips
orangedrinkandchips's picture

Much like the Golfer who has an index of 5 or below BUT never really counts the 2-3 ft putts missed OR the mulligan per round. Never finish out.


So, they get to a tourney which is a maximum 5.4 index or below and stink up the joint!


A "5" handicap or index or below should NOT turn in a 95 in any tourney! 



Mon, 07/08/2013 - 16:58 | 3731907 SheepDog-One
SheepDog-One's picture

Right, isn't that like a recent Chinese president who reportedly got a hole-in-1 on every fairway he ever played on?

I hate handicap systems they're bullshit that's why I quit my APA pool league, nothing but a bunch of sandbaggers.

Mon, 07/08/2013 - 18:51 | 3732075 francis_sawyer
francis_sawyer's picture

"A "5" handicap or index or below should NOT turn in a 95 in any tourney! "


Not completely true... I was playing in a US AMATEUR qualifier one time & shot a "92" in my first round in a heavy downpour [& without a caddie, only one dry glove, & 2 rivets missing on my umbrella]...

By the 2nd 18... The sun came out, I bought a half dozen dry gloves & a few towels, & tossed in a "68"...

Still missed getting one of the 3 qualifying spots though... [& I only even bothered playing the 2nd 18 holes because if I didn't, I would have gotten the 'Wells Notice' from the USGA, which I'd gotten once before after shooting an "81" in a US Open qualifier]...

Mon, 07/08/2013 - 20:21 | 3732558 orangedrinkandchips
orangedrinkandchips's picture

True FS....true dat. I will grant you, if it was like Caddy Shack, where he shot even in the hurricane, lol.


I can agree. I went from a 74 to a 92 on a track near me that was going to host the state jr. am! I could get about 14 GIR and still come out with a 92. So many 3 putts it was annoying. Anything level or above the hole it's 3 bomb city. So brutal, during the tourney I watched a mother witness her son's 4 bomb on his final hole. She looked at me in disbelief like she saw a ghost! By the final day they slowed considerably so obviously people bitched. It is so fun to watch the pro's struggle though....

US Open and US Am should be brutal.

good deal....hit em solid

Mon, 07/08/2013 - 18:15 | 3732149 Abi Normal
Abi Normal's picture

No, that was Kim Junk Un that fatboy from NKorea...he ended up using heads when he ran out of balls...bada bing!

Mon, 07/08/2013 - 16:59 | 3731915 sosoome
sosoome's picture

The golfers I know do the opposite. They miss a lot of short putts driving their handicap higher leading up to a tourney.

Mon, 07/08/2013 - 18:13 | 3732120 francis_sawyer
francis_sawyer's picture

It actually a tough thing to 'manage' properly...


So... Imagine you're playing together with a "money group" at your club... Besides all the bets you have within your foursome, you might have 10 or 20 bets out there in a group OUTSIDE your foursome [nassaus, pot bets, clears, whatever]... You might have $500 [or more] of these on any given day... So you gotta play... But you also have to keep your ear to the ground on where you can tank a putt [mostly, say, on a bet within your foursome, OR, say, on raking some carryover clears & getting your bank early in the round]...

So your 'sandbag' rounds have to mostly be done during the week [but you still need a witness]... & with equitable stroke control, there's only so many holes you can tank if you carry a low handicap...

As well... You're trying to thread the needle by keeping your handicap low enough to qualify for the USGA state & national tournaments, but keeping it high enough so that you don't get cleaned out at your MEMBER/GUEST calcutta...

& the USGA system is 10 out of your last 20 scores [slope ratings included], so not only do you have to remember your last 20 rounds [& do the math on that], but you have to do that math factoring in the course rating you're playing as well what 'tees' you're playing on... IOW ~ you basically have to KNOW before you even 'tee it up' what score you have to shoot [then juxtapose that against your bets for the day]... And it's not always that easy to 'feather in' that number because it's not just like you can GO LOW thru 15 holes then card a double or triple on the last 3 holes... There may be 'presses' on your bets at that point, OR, the 'handicap number' of the holes, with equitable stroke control rules of USGA, may not permit you to CARD a bogey on any of those for the score you enter into the system...

Full time job...

Mon, 07/08/2013 - 20:28 | 3732579 orangedrinkandchips
orangedrinkandchips's picture

big time hard to manage, which is the point of it!! lol. I played in my wife's bosses member/guest and he is a 20 at his club. I did an average of my last few clubs, gave them to the pro and he calculated it -2 since I didnt carry a formal index (but do now for sure). We got second and I do love the high handicaps. If he does OK you win big...


But they gave me a 7 which I said 9 but 7 was right. The formula is complex, throw out top and bottom and divide by the temperature of a load of shit smothered in a combo of bleach and hydrocloric acid, multiply that by the velocity of a doves wing in mid flight......


just plug it in the spreadsheet. 


Now bowling i find it's easier for other to sandbag, but I cant even get my average sometimes much less sandbag!

Mon, 07/08/2013 - 16:53 | 3731899 HowardBeale
HowardBeale's picture

Goldman must be all in short the S&P after near two weeks of ramp and distribute/short, as look at Yahoo's unprecedented headline: 


Alcoa Posts $119M 2Q Loss on Restructuring Costs

Mon, 07/08/2013 - 17:00 | 3731910 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

Years back, Greenspan spoke of the huge societal benefits of floating rate mortgages.

I wonder if he feels the same way about floating EPS estimates?  The equity investors' best friend.

Mon, 07/08/2013 - 17:07 | 3731935 H H Henry P P P...
H H Henry P P P Paulson's picture

AA management may need to attend AA after that earnings release.

Mon, 07/08/2013 - 17:14 | 3731956 yogibear
yogibear's picture

Low-balling and beating is an old pump scheme. Still works!

Hoping for higher aluminum  prices because I have loads of scarp.

Mon, 07/08/2013 - 17:21 | 3731988 Pairadimes
Pairadimes's picture

Seven cents per share, on the way to seven cents, period. And this makes the stock go up. Bonuses all around. Winning.

Mon, 07/08/2013 - 17:22 | 3731992 Burst
Burst's picture

The reason Herr Kleinfeld is "really not concerned" about China has nothing to do with the strength or lack thereof in the Chinese economy.  Only 1.4% of Alcoa's 2012 revenues came from China.  But on Bloomberg it still makes a nice headline.


Mon, 07/08/2013 - 17:23 | 3731993 ebworthen
ebworthen's picture

Klaus Kleinfeld on CNBC:

"Ze performanze of ze company iz spegtagular, zhere are no problemz.  Ve are building out our value-added buzinezz."

Yeah, firing employees and cutting corners.

Klaus on Chinese economy:  "Ze Chinese economy iz fine, do not worry."

Bill Griffiths asking a hard question about the 75% collapse in Alcoa stock price in the past five years.

Klaus pulls out the "apples to apples" meme, and legacy issues, and "creating shareholder value".

He's made his millions, and will get a very shiny golden parachute when board members decide that changing CEO's will improve performance in a non-recovery Ponziconomy (*cough*).

Mon, 07/08/2013 - 17:27 | 3732011 nickels
nickels's picture

Alcoa lost .11 per share, however if we exclude various business expenses, we would have made .07 per share. If we exclude a lot more expenses, we would have made a lot more.

Mon, 07/08/2013 - 17:29 | 3732018 Wanton1
Wanton1's picture

Alcoa is the 800 lb. gorilla in the chemtrail business.

Megatons of aluminum nano-particles blanket the globe.

Mon, 07/08/2013 - 17:55 | 3732096 Al Huxley
Al Huxley's picture

So I've heard.  You'd think the reported demand for aluminum would be up, with the amount of spraying going on.  I remember back in the old days, when the skies weren't criss-crossed every day with 'contrails'.

Mon, 07/08/2013 - 17:29 | 3732019 Al Huxley
Al Huxley's picture

Honestly, its time for all these companies that 'dig stuff out of the ground' to enter the 21st Century.  They're all getting their asses kicked by the banks, who can turn out paper versions of their products with a production cost of pennies/oz, lb, ton, whatever.   I think shareholders of any of these old-school companies need to start sending angry letters to the executive and boards insisting that the companies switch over to production of these much cheaper paper products and mothball the old, uneconomical 'physical product mines'. 

Mon, 07/08/2013 - 17:39 | 3732046 Moe Howard
Moe Howard's picture

You are right. From now on, I'm buying only paper gold and paper silver jewelry for my wife. No more of that dirty from the ground crap.

Mon, 07/08/2013 - 17:43 | 3732056 Black Forest
Black Forest's picture

She will much appreciate your deep hearted decision, I am sure.

Mon, 07/08/2013 - 17:39 | 3732049 tedstr
tedstr's picture

Shares outstanding are also down about 10% over the past two years.  Helps

Mon, 07/08/2013 - 17:56 | 3732102 Abi Normal
Abi Normal's picture

They paid down debt don't ya know, geesh!  Everything is moar better now, carry on muppets.  Where do they get these economist degrees these days?  From a cracker jack box? pfffft

This is miss today IMHO, even though they paid down some debt, rah rah.

Mon, 07/08/2013 - 18:02 | 3732106 Yen Cross
Yen Cross's picture

    Forward guidance has devolved into, "a bunch of shit faced Krugmanites", throwing 'Nerf Darts ®' at a velcro wall during a wind storm!

Mon, 07/08/2013 - 18:26 | 3732169 XRAYD
XRAYD's picture

AA is always "first" to report! Now likely to be the first DOW stock to file for chapter 11 - but it will be out of the DOW by then, replaced with a stronger horse to take us to ever new highs ... all the way to 36,000!

Mon, 07/08/2013 - 18:45 | 3732222 Palladin
Palladin's picture

You gotta hand it to the financial MSM for pulling the wool over the average Joe's eyes.

How come the MSM fails to mention that 10 years ago AA's stock price was around $40.00 a share, and today it's hovering around $8.00. So for that -80% return the people that run AA get:

Dr. Klaus Kleinfeld Ph.D., rer. pol., Dipl.-Kfm.   Chairman, Chief Exec. Officer,   Salary: $4,130,000  (WTF  do all the letters mean ??)

The rest of the executive line-up can be found here:

And if AA went to zero, what effect would it have on the DOW ??  Just 60 points.....aaand it's gone. 

But it's nothing new, every earnings season the MSM trots out that girly man John Chambers to tell you how wonderful everything is over at CSCO. Not once has Chambers been asked to comment on the 10 year stock performance of Cisco. It's not as bad as Alcoa, only -60% over 10 years. And last year Chambers made $12,390,000.

Mon, 07/08/2013 - 19:06 | 3732264 knukles
knukles's picture

Dipl.-Kfm (diploma Kaufman) is loosely the same as an MBA

rer pol, no idea.
Maybe something about taking it up the rear politely, but I sincerely doubt that to be the case....

Mon, 07/08/2013 - 19:36 | 3732384 jerry_theking_lawler
jerry_theking_lawler's picture

since I have to do something while cooking dinner...i often watch kudlow on CNBS...Seema Mody just had a slip, Kudlow asked Seema, "Do you see a reason for this"...speaking on the expected uptick in aluminum pricing...Seema say"i think they are also seeing were to....were....pretending too...expecting to see an uptick from China"


haha. love these little bits when the truth just kinda 'squeaks' out.....kinda like a fart in church.

Tue, 07/09/2013 - 06:25 | 3733472 FJ
FJ's picture

Some kind of Ph.D. but who cares about overrated degrees when nepotism reigns...

Mon, 07/08/2013 - 19:46 | 3732417 BlueCheeseBandit
BlueCheeseBandit's picture

Believe! Obey! Fight!

Forward comrades!

Mon, 07/08/2013 - 20:09 | 3732522 sbenard
sbenard's picture

And the stock futures LIKE it!

Does anyone smell a bubble odor around here?

Mon, 07/08/2013 - 20:29 | 3732586 TickTickTick
TickTickTick's picture

Keep frickin' that chickin!!!!!!!!

Mon, 07/08/2013 - 21:45 | 3732742 jim249
jim249's picture

So who tipped off the analysts to lower their estimates a week before the earnings release?

Tue, 07/09/2013 - 02:10 | 3733349 tom
tom's picture

Alcoa, of course. Virtually universal practice among listed companies.

Tue, 07/09/2013 - 02:08 | 3733345 tom
tom's picture


Tue, 07/09/2013 - 13:20 | 3734451 dunce
dunce's picture

A few years ago i bought an Australia aluminum company thinking that they could sell all they could mine to China. About a 70% loss and i can not even sell it to cover profitable trades because it is in my IRA.

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