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Q1 Earnings Season Summary: More Than Half Have Missed Revenues
When it comes to Q1 earnings expectations one thing is well known: they are low. Very low. So low in fact that as we showed earlier this week, Q1 earnings growth is now projected to be the lowest since Q3 2012, a dramatic change from EPS expectations at the start of the first quarter when it was optimism, all the way.
The reason for this collapse, as is well-known, is that after starting off the year on a massive euphoria binge and forecasting that this will be the year when growth finally takes off (after 5 years of false starts) companies quickly realized the economic growth is just not there, and whether one blames it on the weather, or on Russia, or - the real culprit - the sad state of the US consumer and thus, the Fed, it was time to greatly lower EPS forecasts.
Sure enough, this is what EPS expectations for Q1 looked like during Q1. A disaster:
So with the bar set so low, it is no surprise that most companies, or 65% of those reporting Q1 earnings so far, have beat EPS expectations (perhaps what is disturbing is that as much as a third have missed).
But what about revenues.
As it turns out, in their euphoria to lower EPS estimates, the sellside lemmings forgot all about revenues. This is confirmed by the chart below, showing that while EPS expectations were plunging, sales estimates were largely flat.
Oops.
Because according to the Deutsche Bank Q1 earnings tracker, while two thirds may have beat earnings, a stunning 51%, or a majority of the reporting companies have missed Q1 revenue estimates.
That's ok: the top-line recovery will come in the second half of 2014. Or the third. Or the fourth. One thing is certain: by the 10th half of 2014, the economy will be in "escape velocity."
Just joking - as long as the Fed is around, and as long as it is more attractive for companies to buy back their own stocks and reward their "activist" shareholders instead of planning for long-term growth, and investing in Capex instead, there will be no revenue growth. Period.
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Figures lie. Liars figure.
And Satoshi rules all!
These figures are not even inflation adjusted. If you'd adjust them, then you'd have a negative growth in both EPS and Revenu. Yet here we are with the S&P near an all time high and refusing to drop. The Masters of the Universe have everything controled in their HFT matrix. One really wonders how much longer this farce can continue.
Where are the unicorns crapping skittles and farting rainbows? I sure do miss them.
No growth. No earnings. WWIII is brewing. FED is removing QE. Markets at ALL TIME HIGHS.
VIX is at 13.
I am truely going to go bunkers.
yes but 'everyone' knows that when things get really bad again, moma FED with her qe milk will be there to save the day... right?
Fed's mama Yellen is already feeding through the Belgium backdoor with an increase QE. Tappering is the biggest scam of all. There is no tappering.
"There is no tappering."
Nor tapering.
AK
You'll go bonkers trying to figure it out. You have two choice:
1) Stick your head back in the sand and BTFATH
2) sell everything and Turn off all electronic devices for 1-2 monhs to get your sanity back
The Fed isn't removing QE. Belgium now serves as a proxy for debt monetization. There is no way that this small bankrupt nation could have bought 141 billons of treasuries since last December. In the same period, the Fed supposedly tapered 60 billons of MBS and treasuries. So the net effect was a QE increase of 81 billons. That explains that the 10 years yields has gone down since last December.
I am truely going to go bunkers.
Dont fight it.....Go with it!
Embrace the INSANE!!!!
Bunkers Hill, one of the last great and victorious 'merkan military campaigns! hoo ra!
Just go with it, buy spoos. They are unstoppable.
Yes but, weatherish escape velocity...etc etc...now get back in there and buy some more stocks you damn insolent peasants!
bullish and smash-ish for vix
The only things selling well are: guns, ammo, lotto scratch off tickets, Duck Dynasty T-shirts at Walmart and some luxury cars. Garden seeds, vegetable plants and fertilizer should be doing well too. The weather is not the problem.
Missing expectations means expectations are just too damned high.
"expectations are just too damned high."
Just like the rent!
the fed forcing people to pay more for food and energy can only help, right?
You have to wonder if everyone is estimating earnings lower what idiots estimated so high they missed. Shit must be collapsing faster than they can estimate down or are they just......idiots?
The higest end cars are selling very well....I have not figured that out...who wants a $500,000 car???? that is pretty showy.....but they are making sales records...
Clerk walks into Boss's office and says " The auditors have just left, sir ".
" Have they finished checking the books ? " asks the Boss.
" Very thoroughly " is the reply.
" Well, what did they say ? " asks the Boss.
" They want 15% to keep quiet ".
" That's great ! ", sez the boss, "Last time they wanted 20%. "
Fuck!!!! I bought stocks back in 2011 based on those expected growth trends. I must be losing a ton of money!!!!
"European equities rose in late trading on Thursday after losing ground earlier in the session, with upbeat results from major U.S. companies like Morgan Stanley, Goldman Sachs and General Electric improving sentiment."
Hmmmm?????????????
"Hmmmm?????????????"
Newest "improving sentiment" is: "at least we're not Lehman!"
You couldn't tell from all the cheerleading Bloomberg business reports pinging my phone every morning.
Even if they MEET revenue expectations, the lack of significant top line growth power is distrubing. How much more erns can they financially engineer? How about EBITDA anyone got that summary?
It's a good thing the stock market is still near historic highs, or we might think the economy was slowing down!
But who needs profits? We have PRINTED prosperity now!
Print faster you fat bitch!!!!!!!!
Things like earnings and revenues are interesting, but I'd rather know what time does the S&P ramp up begin?
Stock market keeps rising for the reasons stated here and because the wealthy don't know how else to create wealth. So they settle for "wealth."