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How deep will the earnings malaise go? Fresh from 'beating' much-reduced estimates, companies are taking another hack at guidance going forward, writes MoneyShow's Jim Jubak, also of Jubak's Picks.

It’s not the dimension, but the direction that has the financial markets worried today.

Alcoa (AA) reported third-quarter earnings of 3 cents a share—excluding non-recurring items. That was better than the consensus estimate of a flat quarter. At $5.83 billion, revenue was down 9.1% from the third quarter of 2011, but above the consensus estimate of $5.57 billion.

The problem, though, is that those better than consensus numbers came with a lower company forecast of global aluminum demand for 2012. Alcoa now estimates that global demand will grow by 6% in 2012. That’s down from the company’s earlier forecast of 7% growth.

Demand growth of 6% would be the lowest rate of increase since the Great Recession. Demand grew by 13% in 2010 and 10% in 2011. (The company also said that it still expects that global aluminum demand will double from 2010 to 2020.)

The reason for the lower forecast? China, of course. Slower economic growth in China means slower growth in demand for aluminum. When does that slower growth in China stop, and when does China’s growth rate start to accelerate again?

Alcoa CEO Klaus Kleinfeld told analysts and investors on the company’s conference call that he was “pretty confident” that stimulus measures by the Beijing government would result in an acceleration in demand, but that it was “probably going to take until the end of the fourth quarter” before the company and the Chinese economy in general saw the results.

You can see why this earnings report might make investors uneasy. On the one hand, Alcoa has reported a pattern of steady falling growth in global aluminum demand, from 13% in 2010 to 10% in 2011 to an expected 6% in 2012.

On the other hand, all that investors have is a CEO’s confidence that China’s stimulus measures will work and that investors should be able to see the results at the end of the fourth quarter.

It also doesn’t help that other companies have echoed Alcoa’s forecast for slower growth. For example, today diesel engine maker Cummins (CMI) lowered its full-year revenue guidance for 2012 to $17 billion from a previous $18 billion. Earnings before interest and taxes (EBIT) are expected to be 13.5% for the year, down from prior guidance of 14.25% to 14.5%.

Cummins actually reports earnings on October 30.

Full disclosure: I don’t own shares of any of the companies mentioned in this post in my personal portfolio. The mutual fund I manage, Jubak Global Equity Fund, may or may not now own positions in any stock mentioned in this post. The fund did not own shares of any stock mentioned in this post as of the end of June. For a full list of the stocks in the fund as of the end of June see the fund’s portfolio here.