S&P500 Sales Per Share Charts

The FactSet Earnings Insight report of July 12 contained two charts depicting S&P500 revenues from a long-term perspective.

For reference purposes, below are the two charts depicting S&P500 sales.

The first chart depicts S&P500 annual revenues (and future estimates) on a Sales Per Share (SPS) basis since the year 2000, as depicted:

Calendar Year Bottom-Up SPS Actuals & Estimates

FactSet Earnings Insight 7-12-13 - SPX SPS Since 2000

The second charts depicts S&P500 quarterly revenues (and future estimates), since Q4 2010, on a Sales Per Share (SPS) basis, as depicted:

Quarterly Bottom-Up SPS Actuals & Estimates

FactSet Earnings Insight 7-12-13 - SPX SPS Since Q4 2010

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StratX, LLC offers the above data and projections for informational purposes only, and does not necessarily agree with information provided by these outside parties.

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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 optimally increase revenues and profitability.

Q2 Revenues And Earnings Commentary

Today the Wall Street Journal published an article regarding the outlook for Q2 2013 earnings, titled “Earnings in Spotlight as Fed Jolt Fades.”  The article contains various statistics and commentary regarding projected earnings and revenue.

Here are two notable excerpts:

“We’d be very surprised if there was a huge pop in earnings,” says Wayne Lin, who helps oversee $9 billion as chief strategist at Legg Mason LM -0.69% Global Asset Allocation. “If you don’t have top-line growth and your margins are at historically high levels, where are you going to get your earnings from?”

also:

After years of boosting earnings through cost-cutting, many companies need revenue growth in order to keep the bottom line growing, analysts say. But that is a daunting challenge because of still-sluggish economic growth. Revenue at companies in the S&P 500 is expected to climb just 1% in the second quarter compared with a year earlier, according to FactSet.

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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 (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.

Business Expectations Concerning Price Changes And Unit Costs

The Atlanta Federal Reserve publishes a monthly report titled “Business Inflation Expectations” (BIE) that contains statistics from a survey of regional businesses’ views on various factors that impact profitability.  These factors include unit cost expectations, sales, profit margins, and price change expectations.

As described on the site:

Approximately 300 panelists receive the survey each month. Panelists represent businesses of various sizes headquartered within the Sixth District, which encompasses Alabama, Florida, Georgia, and sections of Louisiana, Mississippi, and Tennessee. Panelists range from executives of large corporations to owner-operators of small businesses. The industry composition of the panel roughly reflects the makeup of the national economy. Nevertheless, survey responses are weighted by industry shares of national gross domestic product.

A couple of excerpts from the BIE Survey (involving 190 firms) of June 21 include:

Respondents indicate that, on average, they expect unit costs to rise 1.8 percent over the next 12 months, roughly in line with the recent year-ahead inflation forecasts of private economists.

also:

The special question asked respondents to assign likelihoods to various price change scenarios over the coming year. 

Respondents’ mean expectation (weighted by industry share of GDP) for the change in the average price of their products and/or services was 1.5 percent.

Here is a chart depicting responses to the question of Year-Ahead Price Change Expectations:

Fed 6-21-13 - Atlanta Fed BIE Year-Ahead Price Change Expectations

 

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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 (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.

Importance Of Company Profitability To CFO Compensation

Recently Deloitte released their “CFO Signals” “High-Level Summary” report for the 2nd Quarter of 2013.   There are various notable items seen in the report; two items seem especially notable from a company profitability perspective.

First, as seen on page 5, regarding the importance of profitability to CFO compensation:

Growth is important, but profitability is still king when it comes to driving CFO compensation. More than 95% of CFOs report at least moderate influence and 75% report strong influence. But it is interesting to note that economic performance (through metrics like ROIC that incorporate both income statement and balance sheet measures) are the next strongest driver of CFO pay, with more than 70% of CFOs reporting moderate or strong influence. Also interesting is that measures more limited to the functional scope of finance (factors like liquidity, cost of capital, treasury returns, and tax efficiency) are considerably less influential – but there are important industry differences.

Also of note is an item seen on page 14 regarding (company) “Board Worries” of an external nature.  Under the “Industry” Category, “Intensifying Competition” (prices, tactics, etc.) is seen as having a high (relative to other worries) percent of CFOs naming the risk as a top-three concern.

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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 (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.

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

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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 (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.