Thanks to AD on "Zeev's Turnips" thread for this find:
NASDAQ 100 Companies Report Combined Losses Of Over $82 Billion To The SEC While Reporting Profits Of $19 Billion To Shareholders
1/23/2002 12:25:00 PM
ALBUQUERQUE, NM, Jan 23, 2002 (INTERNET WIRE via COMTEX) -- For the first three quarters of 2001, the one hundred companies that make up the NASDAQ 100 reported $82.3 billion in combined losses to the Securities and Exchange Commission (SEC). For the same period, these companies reported $19.1 billion in combined profits to shareholders via headline, "pro forma" earnings reports--a difference of $101.4 billion or over $1 billion per company.
The five largest NASDAQ 100 companies (by market capitalization) had combined profits both on a GAAP and a pro forma basis; however, Microsoft (MSFT), Intel (INTC), Cisco Systems (CSCO), Oracle, and Dell reported combined real profits of $4.4 billion to the SEC, but they reported $13.4 billion headline profits to shareholders via pro forma earnings--$9.0 billion more. Thus, sixty seven percent of this group's headline pro forma profits resulted from net positive pro forma adjustments made to GAAP earnings.
These findings of a recent research study were released today by SmartStockInvestor.com, LLC. The complete report of the study is available at www.smartstockinvestor.com/commentary.html. It includes discussion of Cisco and Intel earnings releases. For the first three quarters of 2001, Cisco lost over $3 billion on a GAAP basis, but reported pro forma earnings of $0.7 billion that "beat the street." Intel's "beat the street" headline earnings were more than three times GAAP earnings.
Reports to the SEC (10Q's and 10K's) are regulated, must follow Generally Accepted Accounting Principles (GAAP), and are subject to audit. Headline, pro forma earnings are unaudited, and, in a poor economy, are varying more and more from GAAP as companies struggle to meet earnings projections.
Outgoing SEC Chief Economist Lynn Turner says pro forma earnings are effectively "EBS" earnings--"Everything but the Bad Stuff."
As seventy five percent of NASDAQ 100 companies used pro forma reporting to significantly improve GAAP earnings by an average of $1.6 billion per company, study author John May, MBA, suggests the research indicates that the SEC's promised crackdown on pro forma reporting should happen sooner rather than later.
The NASDAQ 100 stocks can be purchased in a group via the tracking stock, QQQ (QQQ). |
