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Re: ash111 post# 2513

Monday, 07/11/2016 6:15:01 PM

Monday, July 11, 2016 6:15:01 PM

Post# of 2778

Some companies are notorious for buying back billions in stock in order to mask the decline in their earnings by reducing the number of shares outstanding. Alcoa, which still has a major debt overhang from the last financial crisis, is unable to do that as it simply does not have the free cash flow to dedicate to shareholder friendly activities: in fact, in the second quarter Alcoa's Free Cash Flow tumbled to just 55 million down from $205 million a year ago.

Instead, Klaus Kleinfeld's company is forced to resort to an even more primitive form of EPS fudging: massive quarterly EPS addbacks.

And as we showed last quarter, and the quarter before that, and the one prior, and so on, AA's addbacks continue to be the gift that keeps on giving.

Last quarter we were curious if as a result of this "bathwater" quarter, Alcoa would finally cease this deceptive practice.

The answer: not even close.




http://www.zerohedge.com/news/2016-07-11/how-alcoa-just-converted-half-billion-ltm-loss-half-billion-profit
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