As stated in the “Businesses In A Weak Economy” page:

One condition that seemingly lacks recognition – yet is highly material – is the continued “lagging” nature of revenue growth.

Today, the Wall Street Journal published an article titled “Companies Feel Pinch On Sales In Europe,” in which first quarter S&P500 revenue forecasts, as well as various company revenue results are discussed.  A few notable excerpts include:

With earnings reports in from more than half the companies in the Standard & Poor’s 500-stock index, first-quarter revenue for the group is expected to shrink 0.3% from a year earlier, according to Thomson Reuters. That would cut short the sales improvement reported at the end of last year and mark the third quarter out of the past four in which revenues have failed to grow by 1% or more.

also:

Some investors are troubled by the weakness because they view revenue as a better gauge of global economic health than profits. “The lack of revenue growth really doesn’t justify new head count or capital expenditure,” said Jim Russell, senior equity strategist at US Bank Wealth Management. “This is one of the reasons we see a stagnating sticky high unemployment rate.”

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Nasdaq.com today published an article titled “Q3 Earnings Season Mostly Behind Us – Earnings Trends” that contained a variety of statistics with regard to third quarter earnings and revenues.

A notable excerpt:

Any way you look at it, it has been a fairly weak earnings season; the weakest since the start of the current earnings cycle in 2009. Importantly, this earnings season has raised credible doubts about the earnings outlook for the fourth quarter and beyond.

Today, Barron’s had a blog post titled “Companies Beating Q3 Earnings Expectations, But Revenue is Worrisome.”  The post discusses the earnings and revenue figures being reported for the 3rd quarter.

A couple of notable excerpts include:

Right now, S&P 500 earnings are on track to rise 1.1% year-over-year, based on results that were already reported through Thursday morning and expectations for results that will come out soon.

Also:

But there’s a bigger problem that this earnings season is revealing: revenue growth is still anemic, after rising just 1.9% in the second quarter. So far this quarter, S&P 500 have posted 1.2% revenue growth.

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

North American companies have announced plans to eliminate more than 62,600 positions at home and abroad since Sept. 1, the biggest two-month drop since the start of 2010, according to data compiled by Bloomberg. Firings total 158,100 so far this year, more than the 129,000 job cuts in the same period in 2011.

also:

So far, out of 235 S&P 500 companies that have released third-quarter earnings, 137 have reported sales that trailed analysts’ estimates, according to data compiled by Bloomberg.

also:

“A lot of companies have been positioned for continued growth and we’re seeing some stagnation or a modest decline,” Andy Kaplowitz, a New York-based industrial analyst for Barclays Plc, said in a telephone interview on Oct. 24.

also:

The world’s largest economy probably grew at a 1.8 percent annual rate in the third quarter after expanding at a 1.3 percent pace in the previous three months, according to the median forecast of economists surveyed by Bloomberg before an Oct. 26 Commerce Department report. It would be the first back- to-back readings lower than 2 percent since the U.S. was emerging from the recession in 2009.

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Yesterday (October 23) The Washington Post published an article titled “Stocks sink as companies report weak revenue…” that contained various notable commentary with regard to weak revenue and related issues.

Three notable excerpts include:

The Dow Jones industrial average plunged Tuesday to its lowest level in nearly seven weeks. Big-name companies reported weak quarterly revenue and lowered their forecasts for the rest of the year.

also:

Companies of all stripes signaled that the economy is far from healed, and that demand is weaker than a year ago. Revenue fell compared with a year ago at DuPont, 3M, UPS and Xerox.

also:

And of 123 companies in the S&P 500 that had reported as of Monday, only 38 percent beat expectations on revenue, according to John Butters, senior earnings analyst at FactSet, a provider of financial data.

That’s far below the average of the past four years of about 56 percent. It’s also the lowest proportion since the first quarter of 2009, when the stock market hit its lowest point of the Great Recession.

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.

Weakening Corporate Revenues

Reuters published a story on October 17 titled “Sales stumbles raise fresh worries for corporate America.”   The article discusses recent corporate results that have either missed revenue and/or earnings expectations, as well as several instances of outright corporate revenue declines.

Some notable excerpts include:

A majority – 54.3 percent – of the 70 companies in the widely watched Standard & Poor’s 500 Index that have reported results so far have missed analysts’ revenue forecasts, according to Thomson Reuters I/B/E/S.

also:

International Business Machines Corp, the world’s largest technology services company, missed analysts’ sales forecasts for a fifth consecutive time with a 5 percent drop in the third quarter, as corporate customers in the United States and Canada cut their spending on equipment and services.

also:

CEOs may be wise to reel in expectations for 2013 as it would be difficult to push profit margins much higher, given the slowdown in revenue growth, said Peter Klein, senior portfolio manager at Fifth Third Asset Management in Cleveland, Ohio.

“Margins are pretty rich,” Klein said. “If you have slower revenues and you’ve cut as much (in) expenses as you can, there’s not much more you can do” to grow earnings.”

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StratX, LLC offers the above commentary for informational purposes only, and does not necessarily agree with the views expressed by these outside parties.

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StratX, LLC is a management consulting firm and strategic advisory that focuses on the analysis of current and future weak(ening) economic conditions, and offers businesses and other entities advice, strategies, and actionable methods on how to optimally adapt to such challenging, complex conditions.