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Q3 Earnings Season To Date: Revenue Beats: 41%; Misses 59%

Tyler Durden's picture





 

While as Bloomberg reports the EPS beat to miss ratio so far is 68%:32%, the scariest statistic of the day goes to Deutsche Bank who said that "The beat-to-miss ratio... is running 41%:59% for revenue." This means nearly 50% more misses than beats in the earnings season so far. DB continues: "Recall that Q2 was also one where we saw better EPS beat but weaker revenue performance so it seems that companies have been eking out earnings by squeezing costs and wages."  Now as every entry level analysts, Treasurer and CFO knows, there are 1001 ways to boost ESP cut corporate overhead (and those exclude accounting gimmicks, ahem all banks and GE), chief among them of course is laying people off and replacing them with part-timers and temps (something that has been going on in the US for 3 years now as we first showed in 2010), there is precisely zero way to hide the fact that there is simply less demand for products and services at the very top level in a world in which 2% growth, formerly known as stall speed, is the New Killing it, and in which real disposable income just turned negative once again, not to mention the endless collapse in average hourly earnings.

Y/Y change in real disposable income:

Y/Y change in average hourly earnings:

Source: St Louis Fed

 


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Fri, 10/19/2012 - 09:04 | Link to Comment holdbuysell
holdbuysell's picture

In 1999: We don't measure cash flows, we measure clicks.
In 2012: We don't measure revenue, we measure QEs.

Fri, 10/19/2012 - 09:05 | Link to Comment Everybodys All ...
Everybodys All American's picture

Hope and change. wtf.

Fri, 10/19/2012 - 09:07 | Link to Comment LawsofPhysics
LawsofPhysics's picture

"Beating expectations", all the way down.  Get busy people.

Fri, 10/19/2012 - 09:08 | Link to Comment azzhatter
azzhatter's picture

Apparently things were not looking good at GE so Jeff Immelt and Keith Sherin agreed to sell their children to make the number

Fri, 10/19/2012 - 09:16 | Link to Comment HD
HD's picture

The fact Immelt still has his job is a miracle. He should have been fired four years ago.

Fri, 10/19/2012 - 09:10 | Link to Comment nmewn
nmewn's picture

Bullish!!!

Fri, 10/19/2012 - 09:10 | Link to Comment duo
duo's picture

Can 4 people working 30 hours/week buy more iPhones than 3 people working 40 hours/week?

Fri, 10/19/2012 - 09:14 | Link to Comment NidStyles
NidStyles's picture

Oops, someone made the charts upside down again....

Fri, 10/19/2012 - 09:18 | Link to Comment slaughterer
slaughterer's picture

This market needs no revenue.  

Fri, 10/19/2012 - 09:34 | Link to Comment adr
adr's picture

When inventory can becounted as an asset, instead of a liability,and shipped product can be booked as sold, even if it just sits on a shelf, then yes actual sales don't matter because revenue can be generated out of thin air.

The new normal doesn't need a consumer at all. Employment and wages could be zero and corporations would still book record earnings.

Jobs and consumer activity are the cover story for the ponzi.

Fri, 10/19/2012 - 09:23 | Link to Comment Winston Churchill
Winston Churchill's picture

That second chart matches shadowstats alternate GDP chart perfectly.

Starting at the bottom, and working our way down.

Fri, 10/19/2012 - 09:59 | Link to Comment Quinvarius
Quinvarius's picture

The stock market moves on cheap credit and easy money.  Headline misses and no measurable market downside should be telling you something. 

Fri, 10/19/2012 - 10:27 | Link to Comment Shizzmoney
Shizzmoney's picture

Temping/Part time work is something that has been going on in the US for 3 years now as we first showed in 2010

Actually, it has gone on since 9/11/2001.  This decline has been a slow process, with a bubble period (housing/war) in between.  It is just accelerated now because, well, the corporate fascists in DC have more control over the system now, with money and employment inelastic.

It's not a coincidence that temping and part time work accelerated after 9/11, but not because of the terror attacks (which bled capital), but because that was also the month and year China (where most of the jobs have gone) was allowed into the Free Trade agreements (which no one talked about that year.....maybe it was a coincidence! *pshaw*). 

The majority of America's corporate profits......are due to cheap labor in a Communist country.  Not creating value or new capital, but anteing off the working class in favor of higher asset prices. 

I'm sure Thomas Jefferson and Ike would of been proud.

Fri, 10/19/2012 - 10:32 | Link to Comment khotel
khotel's picture

Bullish for Manpower and Accountemps as part-timers are prime beef right now.

Fri, 10/19/2012 - 11:11 | Link to Comment pragmatic hobo
pragmatic hobo's picture

"companies have been eking out earnings by squeezing costs and wages."

... and buying back shares.

Fri, 10/19/2012 - 11:50 | Link to Comment Shizzmoney
Shizzmoney's picture

It literally is eating their arm to feed the parasite in their stomach.

They can't buyback shares forever, can they?

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