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This Is What Passes For A Good Earnings Season In The "New Normal"
First the good news: so far of the 252 companies reporting Q1 earnings, 74% have beat expectations on the bottom line (in Europe it's a different story with 44% beating and 56% missing). The reason: progressively lowering of estimates for the past 3 months heading into earnings as we showed over the weekend. On the top line, it's a different matter entirely with just 45% of companies beating and 55% missing (indicatively European revenue numbers are just jarring, with only 34% of companies beating top line estimates - that's what happens when you have a depression). None of this should come as a surprise to our readers. Over a year ago we wrote "How The Fed's Visible Hand Is Forcing Corporate Cash Mismanagement" which explained that instead of investing in CapEx and hiring, due to the Fed's imbecilic "endless ZIRP" policy, companies have scrambled to generate immediate returns for shareholders in the form of dividends, buybacks, and in rare instances, M&A. Investing in long-term growth is the last thing on anyone's mind and sure enough revenues are deteriorating the world over.
All of the above summarized in the table below courtesy of Deutsche Bank:
Now, the bad news: while one can easily game expectations and quiet cut forecasts the night before earnings just to "allow" the company to beat them easier, one thing that can not be fudged are trends in time, in either revenue or EPS. And for the best table showing just how ugly corporate America's profitability and revenue have become when stripped of all the noise, we go to the Wall Street Journal and the following summary of Y/Y changes in sales and EPS.
More from the WSJ:
With earnings reports in from more than half the companies in the Standard & Poor's 500-stock index, first-quarter revenue for the group is expected to shrink 0.3% from a year earlier, according to Thomson Reuters. That would cut short the sales improvement reported at the end of last year and mark the third quarter out of the past four in which revenues have failed to grow by 1% or more.
The sales figures are a troubling sign that business and consumer demand remain weak nearly four years after the recession. They are also evidence that a soft patch is developing in the U.S. economy, as optimism earlier in the year gives way to more sobering data on growth in gross domestic product, retail sales and manufacturing. In response, many companies are cutting jobs and curbing investments in an effort to prop up profits, moves that could make it harder for demand to recover.
No further commentary necessary (all of it has been said in the past on numerous occasions already).
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soft patch? WTF is a soft patch
ZIRPTastic!
http://www.youtube.com/watch?v=fyklt01lN_I
Mired in the depths of Mediocrity... [if these were kids, they'd be getting 6th place trophies for their achievements]...
it's like a green shoot but in reverse
These green shoots ended up as skid marks. It is all in what you think a green shoot is.
and where can i buy me one, you know, for the kids.
it would appear a "soft patch" is the quiet time between starting and finishing false wars. hence iraqistan winds down and what? what is that over there? oh syrian chemical weapons? oh that wil not do!
appropriate douche bag quote needed here;
Our misjudgments of friend and foe, alike, reflected our profound ignorance of the history, culture, and politics of the people in the area, and the personalities and habits of their leaders.- douche mcnamara
That area she missed when shaving.
A soft patch is the spot on a baby's head which perfectly fits a beer can.
Just don't leave your beer can there too long, otherwise the baby skull growth traps the beer can, thus making the wearing of baby hats an impossible proposition...
It is something you hit due to bad weather, Easter falling early on the calendar, snow in March,sun in April, not enough homes to sell, rusty cars on the road, dogs barking in the middle of the night, delay in tax refunds, older people retiring early, young people disabling early, natural gas exploding higher, hockey season being shortened, NFL draft being too God damn long and televised too God damned much, gas prices firming due to RIN's, bad weather on the coasts, college students being over-leveraged, did I mention the weather, fear of nukes out of N. Korea, Russian mobsters seeking revenge, Boston bombings, France imploding, Spain imploding, being Cyprused, gold plunging.....these are all part of the soft patch.
isn't a soft patch similar to a golden triangle?
Soft patch is the euphemism for the phrases slow down or recession which have been banned from use during the "recovery". It means, I can't see the green shoots anymore even if I squint.
nothing matters except the feds devaluation of the currency at a 85 billion per month clip.
stealing silently from we the people for a hundred years.
This distribution phase isn't going to last forever though, and when equities start to tank the house of cards will fall apart quickly.
Earth to Americans: Warning! You are four years into a Depression! Mayday! Mayday!
no worries-O's weed/Moochelle's lobster consumption will now be figured in GDP
We're gonna need moar intangibles like unicorn farts and pixie dust.
you need to appoint a government CHEESE CUTTING CZAR before you get any unicorn farts...
After the weed and lobster binge, on to the rescue of the country with EBT and health care for all.
...and many of said reporting companies have had to pull forward 2013 earnings to "miss less miserably than expected" this quarter...which I'm sure is causing criminal syndicate Wall Street analysts to continue P/E expansion calculations on the second half of the year.
How much fluoride paste does the average NYSE trader eat on a daily basis?
None of this matters so why keep going on about it? Constant moaning about why the markets are so effed up is not going to stop ES to breaking to new highs.
So if I promise her 8" but give her 7" she'll still be happy?
Ugh..... you STILL don't get the new, correct way of thinking. WHO CARES WHETHER SHE IS HAPPY OR NOT? All that matters is whether YOU are happy or not.
Hopefully this clears things up for you. All the important people are thinking this way and look how successful they've been. You can achieve that success, too, if you concentrate more on yourself and worry less about other people.
That's right, and in fact it is very complicated, if not impossible to ever know for sure how any other person is feeling.
And if you are not happy, it is her fault.
If you are happy, it is because of your success and coolness.
I'm going long skittles. From CNBC:
http://www.cnbc.com/id/100683882
MarketWatch FTW! http://blogs.marketwatch.com/thetell/2013/04/29/corporate-cash-accumulation-starting-to-slow-index-shows/
Hilarious. These people have no shame.
+1 but your green is bugged.
I love it. Every bit of news is BULLISH. I suppose the Cubs will win the World Series too.
I said to someone that the only way this market could be topped on the WTF scale is if the Cubs win the World Series, The Browns win the Superbowl, the Clippers win the NBA title, and the Kings win the Stanley Cup all in the same year.
Welcome to the "Developed World". Developed meaning past-tense. As in we're done working on it. This is as good as it gets. There will be no meaningful "growth" to pull us out of our mess. If you don't like how it turned out, please feel free to drop a card in the suggestion box and manangement will get back to you. Maybe. I wouldn't hold your breath, though.
...please feel free to drop a card in the shredder and management will get back to you....
Fixed it for you:)
APMEX 1 oz Golden Eagles. Credit Card price: $1,606.79
Corporations have Holder covering their asses. They can write in anything that they want to. The whole crooked system has to collapse before anything will change. The good news is that the collapse of the system is speeding up. Take care of your medical and dental needs before it is too late.
As soon as the consumer confidence data came out I got an email from Bloomturd....
"CONFIDENCE BEATS BY A MAGICAL SKITTLE SHITTING UNICORN AMOUNT OF.......{drum roll}......ZERO POINT TWO PERCENT!".
Along with all the other bullshit we get a 5.5% move higher in Natural Gas.
I'm sorry but I've run out of WTF to describe this insanity.
Unplug the damn machines. It isn't helping anybody. When your internet starts acting up and you can't figure out what is going on, best to unplug the router and reset.
Is there anyone in the MSM that looks at all of this bullshit and will say what needs to be said? Or are they all just too hypnotized by green arrows to care.
"Guy, the drugs are killing you. If we stop them you'll live a long life. If you keep taking them, you're going to die sooner rather than later."
"No, I'm going to keep taking them. At least I'll die feeling good."
duh-everybody knows that more NG is needed in N America to heat homes in the summer-or is it all of those NG powered vehicles crowding US roads?
In this case I believe the withdrawal will kill you just as dead as the drug, only sooner.
That is the situation now faced by our illustrious "leaders." And, by implication, us.
Reporting in from the Eastern Front of The Soviet Stalinist Commisarist Trenches in Britanistan comrades.
Turns out our esteamed gulag operator IDS wants them old folk who have worked all their lives and paid into the system for fuck knows how many years, and recieved little, if fuck all to pay it all back. What little they can manage to gain back from a lifetime of productive work comrade IDS wants them to hand it back over to them. So they can redistribute it better, of course.
This is the same fucking parasite who gets roughly £6,000 sterling per week of our fucking money. This fuckers time for hanging is long overdue. Leave them old codgers alone IDS, you are poking a hornets nest you cunt.
If you have less revenue, then your business is more efficient, because you don't have to move, make, or sell as much stuff.
Stuff just gets in the way of frictionless profits generated frictionlessly as Manna from Heaven, courtesy of the Federal Reserve et al.
Hey, CAT just got an upgrade. Sheesh, why bother? It's all lies. Even our money is a lie. Like a bad sci-fi movie, but we have to live in it. At least spring is here.
Euro close and no PM liquidation margin call for some Euro-land short seller. Proof that everybody is long now. Good times!
Yes Tyler. We all know this - the S&P500 has been doing this for over a year now.
The question is when will these markets turn down? Any forecasts worth sharing?
NEVER...they are "all in" for debasement. Your hundred dollars will get a hamburger in 10 years and the market will be 50000...that is the S&P will be at 50k.
Volumes on the SP and DJ are tanking and have been for some time.
By the time the SP hits 50k, there will be one share trading between JPM and GS once a week.
But if you have something more concise, it would be appreciated. : )
I agree, never. If the market ever drops 5%, it's all over.
Earnings season is on a par with the silly daily nonsense that goes on in Washington DC. Everything is tied to whether or not earnings beat an analyst's estimate, not if the company actually is growing revenues or earning actual profits (minus all the excuses termed as add ins and charge offs). You have the FED jacking up the pot and faulty estimators rigging the scheme. Stocks will still rise to the moon.
Maybe now, you know sell in May.
beginning of apr2012 the market tanked.
beginning of may2012 market tanked again (after retrace)
this fucking 2013 beast keeps going up on shite for volume and takes out previous highs in the process.
last week's GDP "no budge in the market" report was astounding - a 22% miss on Q1GDP
another day ...
WHo needs an economy? We have PRINTED prosperity now!
It's all bullish! lower earnings, lower revenues, lower employment, lower expectations = higher money printing, higher government spending, higher inflation, higher deflation, higher sheeples
Who needs an economy? Who needs jobs? Who even needs reality?
WE HAVE PRINTED PROSPERITY NOW!
“Investors are virtually ignoring how economic data are coming in relative to expectations... The most recent correlation below -0.7 indicates that stocks and negative economic data are moving in almost perfectly opposite directions." Bill Hester
Decades from now, I have no doubt that college texts will be using the Great Bernanke Stock Bubble as a case study in what bubble behavior looks like!
The human appetite for illusion ( or adversion to reality, take your pick) never ceases to amaze me. PT Barnum was a fucking genius.
Tyler, shit in your hand and call it whatever you want.
"Earnings" and "growth" are already taken in the fascist's paradise.