CFO Concerns Regarding Pricing And Margins

In the June Duke/CFO Magazine Global Business Outlook Survey, one of the reports is titled “Tables of Key Numbers.” (pdf) Two areas underscore CFO concerns with regard to company profitability and margins.

As seen on the bottom of page 2, there is a list of items seen under “Top Concerns for U.S. Businesses.”

Under the “MACRO CONCERNS” is seen the following:

  • Consumer Demand
  • Federal Government Agenda/Policies
  • Price pressure from competitors
  • Federal budget deficit

Under the “INTERNAL TO OWN FIRM” is seen the following:

  • Ability to Maintain Margins
  • Cost of health care
  • Attracting and retaining qualified employees
  • Ability to forecast results

_____

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

—–

StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.

Note Concerning Estimated S&P500 Earnings Growth

The FactSet Earnings Insight report of June 21, 2013 had various notable commentary with regard to projected earnings growth and profitability trends for the S&P500:

from page 3:

No Change in Earnings Growth Rate This Week, But Cut by Almost 3/4 since March 31

The estimated earnings growth rate for the second quarter is 1.1%, unchanged from last week. Small upward revisions to earnings estimates for companies in the Financials sector were offset by small downward revisions to earnings estimates for companies in the Materials sectors during the week.
Largest Cuts to Estimates to date: Materials, Information Technology, and Industrials Sectors 
Since the start of the second quarter (March 31), analysts have reduced earnings growth expectations for Q2 2013 by almost three-fourths (to 1.1% from 4.3%). Eight of the ten sectors have lower expected earnings growth rates today relative to the start of the quarter, led by the Materials, Information Technology, and Industrials sectors. All three of these sectors have also witnessed a high percentage of companies issue negative EPS guidance for the quarter.

from page 4:

Estimated Earnings Growth (1.1%), but Falls to -2.2% Excluding the Financials Sector

The estimated earnings growth rate for the index for Q2 2013 is 1.1%. If this is the final growth rate for the quarter, it will mark the third consecutive quarter of earnings growth for the index after reporting an earnings decline in Q3 2011. However, only five of the ten sectors are projected to report higher earnings relative to a year ago, led by the Financials and Telecom Services sectors. On the other hand, the Information Technology sector is expected to report the lowest earnings growth of all ten sectors for the second consecutive quarter.

_____

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

—–

StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.

S&P500 Earnings Estimates Trends

S&P500 earnings trends and estimates are a notably important topic, for a variety of reasons, at this point in time.

FactSet publishes a report titled “Earnings Insight” that contains a variety of information including the trends and expectations of S&P500 earnings.

For reference purposes, here are two charts as seen in the “Earnings Insight” (pdf) report of June 21, 2013:

from page 17:

(click on charts to enlarge images)

CY Bottom-Up EPS vs. Top-Down Mean EPS (Trailing 26-Weeks)

EconomicGreenfield 6-25-13 FactSet EPS

from page 18:

Calendar Year Bottom-Up EPS Actuals & Estimates

EconomicGreenfield 6-25-13 FactSet 6-21-13 EPS Forecasts CY Actual and Estimates

_____

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

—–

StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.

Earnings Forecasts For The S&P500

As many are aware, Thomson Reuters publishes earnings estimates for the S&P500.

The following estimates are from Exhibit 12 of “The Director’s Report” of June 24, 2013, and represent an aggregation of individual S&P500 component “bottom up” analyst forecasts:

Year 2013 estimate:

$111.01/share

Year 2014 estimate:

$123.65/share

Year 2015 estimate:

$135.92/share

_____

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

—–

StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.

S&P Estimates For 2013 & 2014 S&P500 EPS

As many are aware, Standard & Poor’s publishes earnings estimates for the S&P500.

For reference purposes, the most current estimates are reflected below, and are as of June 21, 2013:

Year 2013 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $109.55/share

-From a “top down” perspective, operating earnings of $109.16/share

-From a “top down” perspective, “as reported” earnings of $102.80/share

Year 2014 estimates add to the following:

-From a “bottom up” perspective, operating earnings of $123.34/share

-From a “top down” perspective, operating earnings of $119.57/share

-From a “top down” perspective, “as reported” earnings of $116.90/share

_____

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

—–

StratX, LLC (stratxllc.com) is a management consulting firm and strategic advisory that focuses on the analysis of current and future business conditions, and offers corporations and businesses advice, strategies, and actionable methods on how to increase revenue and profitability.