To: Defrocked who wrote (3144 ) 7/23/1998 9:25:00 AM From: Cynic 2005 Read Replies (2) | Respond to
<<BEYOND TECHS: AT&T (T), COLGATE-PALMOLIVE (CL), MINNESOTA MINING (MMM). Profits might be up big, or down, revenues might be surging or falling, but everyone still beats by a penny. A number of top brand name companies have reported earnings this morning, and the salient feature is that all of them, no matter what the circumstances, are either meeting analyst estimates or coming in a penny ahead. Equally noteworthy, the revenue numbers here are surprisingly sluggish. The following lists earnings relative to expectations and year-over-year revenue growth for top companies that have reported today: CL +2 -1.7%; T +1 +1.0%; MMM +1 -1.3%; Xerox (X) +1 0.0%; Bell Atlantic (BEL) 0 +2.9%; Dow Chemical (DOW) 0 -9.3%. T reported a meager 1% gain in revenues and BEL 2.9%, but not a single other company had revenues increase! In aggregate, there is no revenue growth at all from these top brand name companies. Yet, not one missed earnings estimates. A more impressive case is the report from WorldCom (WCOM), which not only beat earnings estimates by the standard "penny ahead" but also saw year-over-year profits jump to $0.21 per share from $0.04 on a revenue gain of 45.3%. That is legitimate growth. Some of the other companies mentioned above do indeed have solid -year-over-year profit growth, but it is either because of cost cutting or a bad quarter last year. There isn't a lot of underlying growth. In today's market, it has become rare for companies such as these to miss earnings estimates, and none did today. That may or may not be enough to boost the stocks, however, as the market looks deeper into the numbers and sees sluggish revenue growth that if it persists, will make future earnings growth difficult to achieve.
