The Traderszone Network

Published in TZ Latest News 11 January, 2016 by The TZ Newswire Staff

Behold Accounting Magic 101: This Is How Alcoa Just "Beat" Consensus EPS

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

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