If you ask the
"analysts" on Wall Street, they'll tell you that the macro picture
doesn't matter -- it's all about earnings.
Well, based on
following comments from and about several companies that just reported their
quarterly results, it sounds like the economy is a lot more important than
those "experts" have given it credit for [italics mine].
Texas
Instruments:
"Texas Instruments' Profit Forecast Misses Some Estimates" (Bloomberg)
"Production
at some computing and consumer manufacturers appears lukewarm even though
we're heading into the back-to- school and holiday seasons," Chief
Executive Officer Rich Templeton said in the statement.
...
[Chief
Financial Officer Kevin March said] “no one can ignore the glaring headlines. We’ve
gotten lackluster outlooks from our customers in the computer and consumer
segments.”
HCA Holding:
"HCA’s Declining Surgery Rates May Show Slowdown in U.S.
Hospital Industry" (Bloomberg)
HCA Holdings
Inc.’s report of a drop in expensive surgeries may signal a broad
slowdown for hospitals because of rising unemployment and tepid consumer
spending.
Patients at
HCA, the biggest U.S. hospital chain, sought less-expensive procedures during
the quarter, according to the company. Per-patient income from Medicare, the
government plan for the elderly, also fell.
UPS:
"UPS Warns About Curbs on Global Economy" (Financial Times)
Dithering over
the debt ceiling in the US, concerns about sovereign debt in the European
Union and slowing growth in Asia are restraining the global economy,
according to top executives at United Parcel Service, the package delivery
company.
...
[Chief
executive Scott] Davis singled out the political gridlock over debt issues in
Washington and continuing high unemployment as creating a weak US economy that was slowing
demand for domestic services and also imports from places such as China.
AK Steel,
United States Steel, and Nucor:
"Steel Makers Say Slow Economy Will Hit 3Q Results" (Associated Press)
Three of the
nation's steel makers expect weakness in the U.S. and global economy will
affect their third-quarter performances.
AK Steel
Holding Corp. on Tuesday joined United States Steel Corp. and Nucor Corp. in
predicting weaker results in the July-to-September quarter. Individual
companies cited factors ranging from softer demand, higher costs and lower
steel prices to rising supplies that could pressure prices and margins.
UBS:
"UBS Issues Profit Warning on Weaker Economy" (DealBook)
UBS warned on
Tuesday that it would probably miss an earnings target set two years ago,
after its profit fell by half in the second quarter and the economy weakened.
...
“Banks’
returns have declined over all in the last 12 months, reflecting deleveraging
and the actions being taken in advance of increased capital
requirements,” [chief executive Oswald J. Grübel]
said in the statement.
“We are
responding to this changed environment and the weakening economic outlook by
adapting our business and increasing efficiency,” he said.
Illinois Tool
Works:
"Illinois Tool Works 2Q Net Income Disappoints" (Associated Press)
GLENVIEW, Ill.
— Industrial materials-maker Illinois Tool Works Inc. said its
second-quarter net income and sales came in below expectations as demand was
weaker than expected.
Illinois Tool
Works makes everything from heavy equipment to adhesive and flooring
materials. Its sales are
closely tied to broader economic growth. CEO David Speer
said the company expects "similar moderating demand levels in the second
half of 2011."
Michael J. Panzner
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