"AAA Automobile Repair" may take first place in the phone book, but Alcoa's (NYSE: AA) reports have traditionally signaled the start of "Earnings Season" on Wall Street. And on Thursday, the merry-go-round begins anew, as the Archon of Aluminum turns in its third-quarter report card. Will its numbers be as bright and shiny as investors hope?

What analysts say:

  • Buy, sell, or waffle? Sixteen analysts gather 'round the smelter to cover Alcoa. Nine say to buy it, half a dozen hold, and one would sell the stock today.
  • Revenue. On average, analysts expect to see $4.95 billion in Q3 sales, 7% greater than last year.
  • Earnings. And with greater sales come greater advantages of scale. If all goes well, earnings could jump 50% to $0.06 for the quarter.

What management says:
Metals investors got a case of the tremors last month, when analysts large and small, from little Longbow Research to giant Goldman Sachs, began turning negative on the sector. First U.S. Steel (NYSE: X), then Nucor (NYSE: NUE), then Steel Dynamics (Nasdaq: STLD) found themselves downgraded.

But what about aluminum?

When last we heard from management, this business was going swimmingly. Q2 sales had climbed a respectable 6%, profits were rolling in, and the company had even produced a bit of free cash flow ($87 million.) Even better, management told us to expect double-digit growth in end-market aluminum demand.

What management does:
But how has the company really been performing? See for yourself:

Margins 03/09 06/09 09/09 12/09 03/10 06/10
Gross 0.1% 6.6% 15.8% 9.7% 17.9% 19.2%
Operating (14%) (7.5%) 2.4% (3.4%) 4.9% 7.3%
Net (12%) (10.7%) 1.7% (5.1%) (4.1%) 2.6%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
By and large, Alcoa's been doing a nice job of getting its profits back in the black. The gross margin is growing nicely, operating profits seem achievable again, and the company even booked a tiny net profit profit last quarter. Still, so long as Alcoa struggles under the weight of its massive $9.8 billion debt load, it's bound to find its business hobbled. (For comparison, archrival Rio Tinto (NYSE: RTP) carries only about 50% more debt -- on a market cap 10 times as big as Alcoa's. Not coincidentally, Rio's vastly more profitable on every margin level.)

During this quarter, Alcoa used a note offering to fund the retirement of 2012-2013 notes paying between 5.3% and 6% interest, essentially exchanging current debt for debt maturing at a later date with a lower interest payment. Every little bit of savings helps, but here's hoping we see more progress on Thursday.

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Fool contributor Rich Smith does not own shares of any company named above. True to its name, The Motley Fool is made up of a motley assortment of writers and analysts, each with a unique perspective; sometimes we agree, sometimes we disagree, but we all believe in the power of learning from each other through our Foolish community. The Motley Fool has a disclosure policy.