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Getting Ridiculous: 70% Of Alcoa's LTM "Earnings" Are From Restructuring Charges
When the non-GAAP "consensus earnings" bogey that Alcoa has to hit has been cut by a third from $0.30 as of 6 months ago to just $0.22 one would think the company's EPS should be an easy beat.
One would be wrong, because moments ago AA just reported non-GAAP EPS of $0.19, a big miss of the expected $0.22.
And we should stress non-GAAP, because as regular readers know when it comes to Alcoa's "earnings", it is all about restructuring charges. This quarter was no different and Klaus Kleinfeld's company decided to "charge off" another $217 million in "one-time, non-recurring" addbacks.
Wait, did we say "one-time, non-recurring"? The reality is that for Alcoa this is the 9th consecutive quarter in which it has booked more than $100 million per quarter in restructuring charges!
Pperhaps at some point the FASB should take a peek at Alcoa's books for the greatest definition ever of just what "non-recurring" addbacks really mean.
And since we know it won't, here is the answer: in the past year, Alcoa has generated $643 million in clean, GAAP earnings. It has also taken a benefit for $991 million in restructuring charges. This means that of Alcoa's $1.4 billion in Non-GAAP LTM EPS, a whopping 70% of "earnings" come from non-one time, recurring "one-time, non-recurring" charges and addbacks.
At this point the EPS accounting fudgery is so ridiculous, even 5-year-olds get it.
And the real problem is that all S&P 500 companies do it, in fact of the 112 or so in projected non-GAAP EPS, some 15 or so is now totally fabricated "addbacks" which also means that the market's real P/E multiple is about 21x.
No wonder the NYSE has to break at the first more serious hint of selling.
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BUY! it's a global recovery!
CNBC doesn't think it's serious fudgery. It's all smooth, chocolatey goodness. MMMMMMMMMMmmmmmm
yeah, that was like 70% ago... well at least the price of cat food has stabilized, yum!
It's all smooth chocolately goodness, eh?
The trouble is that if you bite into it, it still tastes like a turd.
I think the wording needs to be legally changed to indicate the accuracy of said reports:
"This Earnings Report brought to you by the Bureau of Labor Statistics"
Add Backs are the new CapEx! Sounds good, right?
Show the ChiCOMS how it should be done.
$100 Million isn't a Wall Street traders Hampton house....let me know when they start losing real money
Well, that will be 'ditto' for Microsoft now.
"Getting ridiculous"? cmon
Correct!
In future, the terminology to use is:
“… is so ridiculous that…”
Liars are as lying do......or something like that
Fake it till you make it!
*Sits back...makes popcorn*....Oh man is this gonna be Spectacular when it goes!!!
Or they can just stop trading like China. Stock prices stop falling. Puts decay to squat. Then re-start.
the nazi guy Claus was sposed to be on CNBC ... hw did he spin it?
We incinerated some folks
We smelted some folks
He didn't have to "spin" anything ... it's freaking cnbc. they throw softballs so that the ceo's can hit them all out of the park.
Well I did my part and recycled a soup can so Alcoa makes even less next quarter.
I stopped soft drinks altogether.
I stopped eating out of aluminum pots & pans out of fear from Alzheimers. Or did I...?
It's the deodorant that really gets you.
Fuck you Harvard!
Signed...DARTMOUTH
Why does any of this surprise anyone?
Does anyone have a chart or graph showing was dividends have been paid in total year by year by the various companies on the stock market?
Does anyone have a chart showing how much tax each of these companies have paid year by year?
Does anyone really give a shit?
Mostly management if you do’the math calculating layoff charges.
I heard about the same thing at grainger where they actually pull up lists with management in europe that needs to go.
I sometimes wonder if all those companies go to the same seminars explaining these tricks...
it’s always as "now this management trick is popular so let’s all do this and that!"
Long after they fire themselves they still won't make the numbers.
Sometimes I think the answer really is fishing.
Greece STILL has no reopened their Banks.
Why bother?
Was there ever a "deal" where they didn't get annihilated?
Sometimes you really do do best by just staying home...
"Nine consecutive quarters..." HA! More like nine consecutive years...What a bunch of bullshit (WABOB).
This here company is a systemically important member of the USgAy national defense network. Falsifications are authorized....indeed, encouraged.
Made up numbers in a made up market in a made up society. The charade will go on until the middle class revolts in some form. Meanwhile the Alcoa management will receive their options and restricted stock for "meeting expectations". They'll be cashing out all these financial perks before the whole thing comes apart at the seams. Then we'll start over with a new ponzi scheme.
This is the Bailout Addiction...why Hank Paulson really is smarter than you or me.
He understood what was wrong still needed to be done...and he did it.
"With prayer" indeed.
Now everything is up to everyone else...that somehow they can get "off the Juice" of QE and "no growth forever."
Bullish***
Mortimer take them out of the DJIA immediately, if not sooner! what?
Lying and cheating in business are no longer considered crimes in the U.S.
In fact, they are now the "New American Way."
Financial crimes are now legal according to Obana's Just-Us department.
bidness is slowed---gotta show the bottom line---sharpen the pencil---
Excellent piece, Tylers.
I can only imagine the disdain, comtempt, & utter disgust by which future generations will rightly judge us for the collective misrepresentation, distortions, & outright lies that were promoted as "wisdom" - God forgive us & give us the capability to stand for the truth.
Unless they invent a campfire-powered wifi system, they will have no idea of what happened at this point in time.
@tarabel...if I could, I would give 5 up-arrows,...
Ask and ye shall recieve - http://www.amazon.com/BioLite-BaseCamp/dp/B00OQUSY08/ref=sr_1_4?ie=UTF8&...
Just in on CNBC..."Alcoa UP on earnings 5:30pm EDT
Just in on CNBC..."Whole bunch of bullshit" 5:30pm EDT
Cramer said this was a "no brainer" at $17...sick little kike
Arther Anderson was working overtime on this one.
I thought ALCOA specialized in aluminum mining and production. [scratching head]
Unbeknownst to me, they actually specialize in mining and producing Ridiculum®
See below. 6160/ different temperature temper (t3 to t6). 7070/7075 is used for aircraft temperament. That is sold out.
6160 or 6163 are industrial use. Temperament applies to project based on tensile strength. Rigidity.
Long futures in Unobtainium
The addbacks add up.
Everything's just an illusion.
All those sell-side articles you see claiming that PE ratios are not that much above historical norms are not taking into non-GAAP earnings puffery into account. Before the dot-com era, companies couldn't get away with sweeping losses under the rug by declaring them to be "one time" events. Using the reporting standards of the last century, earnings would be much lower now and real PE ratios are much higher.
Fuck ALCOA aluminum pricing. Watch and learn. It all starts with LME, this gets trickled down.
Midwest (USA) Aluminum Premium - Metal Prices
Earnings sucked. But I will take the fact they beat on revenue as fairly bullish. earnings are easy to fudge, revenue not so much - which is why renenue beats are rare.