EconomicGreenfield » double-digit revenue declines

3Q 2010 Corporate Revenues

Ted Kavadas — Thu, 11 Nov 2010 14:20:02 +0000

For the last few quarters, I have been commenting upon revenue growth in corporate results. I have focused on a variety of diversified manufacturers and distributors, all of them well-respected S&P500 firms. Prior posts on this issue are found at this link.

For the recently released 3Q 2010 financial results, there generally has been decent revenue growth. Many companies have been posting seemingly strong, double-digit growth, but this has been against weak year-ago results. As one would expect, revenue growth appears strongest in the Asia region.

It will be interesting to monitor these revenue growth figures going forward. Revenue growth generally lacks recognition, especially compared to earnings growth and whether companies are matching or beating earnings “expectations.” However, for a variety of reasons revenue growth, and its dynamics, is of the utmost importance, especially in the exceedingly complex economic environment we have been experiencing.

A Special Note concerning our economic situation is found here

SPX at 1218.71 as this post is written

2Q 2010 Corporate Revenues

Ted Kavadas — Wed, 04 Aug 2010 12:25:43 +0000

For the last few quarters, I have been commenting upon the general lack of revenue growth in corporate results. I have focused on a variety of diversified manufacturers and distributors, all of them well-respected S&P500 firms. My last comment on this issue was on May 5.

For the recently released 2Q 2010 financial results, there generally has been decent revenue growth. Many companies have been posting seemingly strong, double-digit growth, but this has been against weak year-ago results. As one would expect, revenue growth appears strongest in the Asia region.

It will be interesting to monitor these revenue growth figures going forward. Revenue growth during our current period of economic weakness is a key issue, and generally lacks recognition, especially compared to earnings growth and whether companies are matching or beating earnings “expectations.”

SPX at 1120.46 as this post is written

1Q 2010 Corporate Revenues

Ted Kavadas — Wed, 05 May 2010 13:04:56 +0000

For the recently released 1Q2010 financial results, it is hard to generalize the revenue growth or lack thereof. Some companies have been posting seemingly strong, double-digit growth, but this has been against weak year-ago results. It appears that many of the firms that have the strongest revenue growth have achieved this growth via sales to the Asia region.

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SPX at 1173.6 as this post is written

4Q Corporate Revenues

Ted Kavadas — Fri, 29 Jan 2010 14:57:23 +0000

I have been looking at the revenue figures posted for a variety of diversified manufacturers and distributors. These are well-respected, S&P500 firms.

One would expect these firms to be posting decent revenue gains, especially as compared to the very weak year-ago period (4Q2008). Additionally, these firms stand to benefit from the prevailing economic climate due to their size, global sales, high accessibility to credit at favorable terms, access to stimulus business, etc. In essence, whatever general economic strength is existent, and then some, should certainly be reflected in their revenues.

Instead of strong or at least a decent 4Q 2009 revenue results, most of these companies are reporting continued percentage sales declines when compared to year-ago results. These declines have ranged in value but are significantly negative, with some being double-digit declines.

This result is not significantly better than the similar comparisons that I have previously commented upon for 3Q2009 results.

This lack of revenue growth is very notable and has many implications. It seems to at least partially belie claims of economic recovery. As well, it would explain why (net) hiring is rather nonexistent.

Of course, there are other implications as well. Among these implications is that the lack of revenue growth weakens any fundamental valuation one may choose to assign to the stocks of these companies.

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SPX at 1091.38 as this post is written

3Q Double-Digit Percentage Revenue Declines

Ted Kavadas — Thu, 22 Oct 2009 14:56:28 +0000

As I have discussed previously, double-digit percentage declines in corporate revenues is a serious issue.

Many well-respected, broadly-based companies have posted double-digit percentage revenue declines for 3Q. This is highly significant in that we are purportedly in an economic recovery; as well, 3Q 2008 should provide a (relatively) easy comparable period as the economy was struggling.

SPX at 1078.7 as this post is written

Double-Digit Revenue Declines

Ted Kavadas — Thu, 13 Aug 2009 14:27:03 +0000

The August 17 edition of Business Week, p19 had a column titled “A Record Revenue Decline.” It can be found here at the bottom of the page:

http://www.businessweek.com/magazine/content/09_33/c4143btw375952.htm?chan=magazine+channel_the+business+week

This line is especially noteworthy: “This marks the first time since S&P started tracking quarterly revenues (in 1993) that revenues dipped 10% or more for three quarters in a row.”

Although the idea of lumping all S&P500 revenues together is perhaps not an optimal way to look at this situation, it still would seem to indicate that the situation with regard to falling revenues is very significant.

As I have commented previously, companies experiencing double-digit revenue declines make for a very challenging and stressful environment, especially as these double-digit declines continue each quarter.

SPX at 1003.52 as this post is written