Tag Archives: Revenues

1,015,736,491,184 reasons to have a Plan B, by Simon Black

The US economy and financial markets had a great fiscal year 2019 and still the government went over $1 trillion deeper in the hole. From Simon Black at sovereignman.com:

Precisely one year ago today, the US federal government opened Fiscal Year 2019 with a total debt level of $21.6 trillion:

Specifically, the US federal debt on October 1st last year was $21,606,948,183,180.23

Today is the start of the government’s 2020 Fiscal Year. And the total debt is now $22,622,684,674,364.43

That means they accumulated more than $1 TRILLION in new debt over the course of the 2019 Fiscal Year.

Think about that for a moment:

FY2019 was, literally, the BEST year EVER measured by short-term US financial performance. The stock market reached an all-time high. Real estate prices reached an all-time high.

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Dow Companies Report Worst Revenues since 2010, Dow Rises to 20,000 (LOL?), by Wolf Richter

There is no consistent relationship between corporate earnings, or revenues, and stock prices. Robert Prechter has demonstrated both truths numerous times. There certainly has not been the last eight years. From Wolf Richter at wolfstreet.com:

Wall Street hocus-pocus has done an awesome job.

The Dow-20,000 hats have come out of the drawer after an agonizingly long wait that had commenced in early December with the Dow Jones Industrial Average tantalizingly close to the sacred number before the selling started all over again.

What a ride it has been. From the beginning of 2011 through January 27, 2017, so a little more than six years, the DJIA has soared 73%, from 11,577 to 20,094. Glorious!!

But when it comes to revenues of the 30 Dow component companies – a reality that is harder to doctor than ex-bad-items adjusted earnings-per-share hyped by Wall Street – the picture turns morose.

The 30 Dow component companies represent the leaders of their industries. They’re among the largest, most valuable, most iconic American companies. And they’re periodically booted out to accommodate a changed world. For example, in March 2015, AT&T was booted out of the Dow, and Apple was inducted into it, as its ubiquitous iPhone had become the modern face of telecommunications. New blood with booming revenues replaces the stodgy old companies. In aggregate, revenues should therefore rise, right?

And there has been a huge binge of acquisitions, from mega-deals such as Verizon’s $130-billion acquisition of Vodafone in 2013, to the many dozens of smaller companies that Apple, Cisco, IBM, and others have bought. These mergers bring the revenues of the acquired companies into the revenues of the Dow components. And in aggregate, revenues of the Dow companies would therefore soar, right?

But the other day, I was asked about the revenues of all Dow components, after having lambasted the revenue debacles of two, IBM [Big Shrink to “Hire” 25,000 in the US, as Layoffs Pile Up] and Cisco [Cisco Buys 45th Company in 5 Years, Revenues Still Stagnate].

So here we go. Fasten your seatbelt.

To continue reading: Dow Companies Report Worst Revenues since 2010, Dow Rises to 20,000 (LOL?)

Revenue Recession Spreads past Dollar, Energy, by Wolf Richter

From Wolf Richter at wolfstreet.com:

Now that 495 of the S&P 500 companies have reported second quarter earnings, something has become abundantly clear: 2015 is going to be a nasty year for corporate revenues.

Blended revenue for the S&P 500 companies dropped 3.4% in Q2, according to FactSet. “Blended” because it includes estimates for the five companies that have not yet reported. This follows the first quarter, during which reported revenues also declined. The last time year-over-year revenues declined two quarters in a row was in Q2 and Q3 2009 during the Financial Crisis.

Analysts liberally blame the strong dollar. It’s convenient. But numerous companies that mostly benefit from the strong dollar, such as GM (more on that in a second), still reported shrinking revenues in the quarter.

And analysts blamed energy companies whose revenues have totally collapsed. But company by company outside the energy sector reported declining, and in some cases plunging revenues, including in Big Tech and financial services.

Here is a sample of revenue losers:

Caterpillar (-13%), Dow Chemical (-13%), MetLife (-12%), Microsoft (-4%), Intel (-5%), International Paper (-21%), JPMorgan Chase (-3%), Johnson Controls (-11%), Oracle (-5%), PepsiCo (-6%), Pfizer (-7%), Procter & Gamble (-12%), Union Pacific (-10%)….

Wait… Union Pacific? Would it blame the strong dollar or the price of oil? Hardly. It doesn’t operate trains in Europe. It doesn’t sell oil. It buys and burns it; so cheap oil is a godsend. It’s blaming the economy, particularly the reduced number of carloads of coal and other commodities. And it’s blaming that obnoxious add-on, the fuel surcharge that has been declining with the plunging price of oil. Surcharges go straight to revenues. Competitive pressures forced it to back off. Easy come, easy go.

To continue reading: Revenue Recession Spreads past Dollar, Energy