I have been looking at the revenue figures posted for a variety of diversified manufacturers and distributors. These are well-respected, S&P500 firms.
One would expect these firms to be posting decent revenue gains, especially as compared to the very weak year-ago period (4Q2008). Additionally, these firms stand to benefit from the prevailing economic climate due to their size, global sales, high accessibility to credit at favorable terms, access to stimulus business, etc. In essence, whatever general economic strength is existent, and then some, should certainly be reflected in their revenues.
Instead of strong or at least a decent 4Q 2009 revenue results, most of these companies are reporting continued percentage sales declines when compared to year-ago results. These declines have ranged in value but are significantly negative, with some being double-digit declines.
This result is not significantly better than the similar comparisons that I have previously commented upon for 3Q2009 results.
This lack of revenue growth is very notable and has many implications. It seems to at least partially belie claims of economic recovery. As well, it would explain why (net) hiring is rather nonexistent.
Of course, there are other implications as well. Among these implications is that the lack of revenue growth weakens any fundamental valuation one may choose to assign to the stocks of these companies.
SPX at 1091.38 as this post is written
No comments:
Post a Comment