What America's CEOs Really Think
With analysts preferring gloss over the massive bellwether stock earnings misses, focus on non-GAAP manufactured releases, and cling optimistically to hopes that weak performance, inclement weather, and volatile currency fluctuations will all go away soon and that the future looks rosy. However, as Bloomberg's Richard Yamarone notes, the US economy continues to cling to an historical subpar growth and CEO comments hardly support any hope for a change.
P&G [PG] Earnings Call 1/24/13: “We continue to operate in a volatile environment with uncertainty in foreign exchange, some deceleration in market growth rates and a rapidly developing policy environment.”
Apple [AAPL] Earnings Call 1/27/13: “We expect four factors to negatively impact the year-over-year revenue comparison by over $2 billion. These are channel inventory increases in the year-ago quarter that we don’t expect to repeat, lower iPod sales, a stronger U.S. dollar against a number of currencies, particularly the yen and the Australian dollar and the higher per unit deferral for Mac and iOS devices.”
Starbucks [SBUX] Earnings Call 1/23/13: “Over the last month or so, I have heard many traditional brick-and-mortar retailers attribute the downturn in their core business during holiday to factors such as a shortened holiday shopping season, a weakened consumer, the U.S. Government shutdown, and poor weather. Respectfully, those explanations ignore a larger fundamental truth and that truth is that traditional brick-and-mortar retailing is at an inflection point. No longer are many retailers only required to compete with stores on the other side of the street. They are now required to compete with stores on the other side of the country.”
Southwest Airlines [LUV] Earnings Call 1/23/13: “Our outlook right now for the economy is very stable. Hopefully, the uncertainties that we had a year ago, hopefully they won’t return. And that would be, obviously, a real good thing. And then fuel prices have been remarkably stable for now three quarters in a row. And at least our outlook, as it stands today, is for yet another quarter of stability there.”
Ethan Allen Interiors [ETH] Earnings Call 1/23/13: “We had sunshine in sunshine states. We had good businesses in California and Florida. And in fact, what happened was that October, this government shutdown did have a major impact on us. We were down 10.5 percent in October. November was somewhat better. We are up 3.6 percent and then the bad weather affected us in December and we are down 2.6 percent.”
McDonald’s [MCD] Earnings Call 1/23/13: “2013 was a difficult year and we’re keenly aware of our short-term challenges. Future economic predictions are mixed, but most assume some limited global improvement in 2014. However, we don’t expect significant changes in market dynamics, given modest growth projections for the IEO industry. Looking to January, global comparable sales are expected to be relatively flat.”
Caterpillar [CAT] Earnings Call 1/27/13: “In most regions, particularly in North America, economically we think a little better, a little better GDP around the world will help that as well. We’ve also seen actually our sales in China Construction improve as well. And it’s probably worth noting that for Construction, we still had a headwind in the fourth quarter on dealer inventory.”
Stanley Black & Decker [SWK] Earnings Call 1/24/13: “The currency trend versus the U.S. dollar for really the four major currencies that tend to have a significant impact on us. The first three have historically had a large impact on us since the merger; the European euro, the Canadian dollar, and the Brazilian real. The Argentinean peso has become more challenging over the last few years as that country continues to see governmental challenges and economic issues.”
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