Displaying items by tag: revenue

(New York)

There are a lot of dark clouds hanging over the market right now—trade war, rates, politics, Italy etc. However, one of the strong bright spots has been earnings. Company performance has been very strong, which has been a real boost against the headwinds. That is why this article scared us so much. Barron’s has run a piece analyzing earnings which shows that all is not what it seems. While earnings have been strong, with about three-quarters of companies beating estimates, what has been lost is that company’s are actually struggling with revenue, with only 58% beating estimates. That is the lowest percentage in six quarters, and shows that companies are having trouble hitting their sales goals.

FINSUM: Markets have reacted to this data, but not in a major way. We are quite worried about revenue struggles as it might indicate that consumers are tightening up and a recession could be on the way.

(New York)

There are a lot of anniversaries to pay attention to this month, not least of which is the 10-year anniversary of the Financial Crisis. This has unsurprisingly sparked a whole wave of articles portending the next crisis. However, another kind of anniversary might be even more troublesome—that stocks are now higher priced than in the dotcom era. While the S&P 500’s P/E ratio is still not quite as high as then, rich valuations are more pervasive now, and price to sales valuations are higher, according to one market analyst. Actually, price to sales is the more worrying metric as stocks in the S&P 500 are now trading at 2.7x revenue versus just 1.2x in 2000.

FINSUM: Stocks are very richly valued right now, that is certain. However, that does not, in itself, portend any immediate problem for the market.

(San Francisco)

It is hard to overstate how well Apple is doing right now. Despite flat volume in phone sales, the huge prices of its devices mean not only are its revenue and profits surging, but it now commands its largest ever share of the smartphone market (51% globally). The company’s first quarter revenue was up 13% from last year, with net income hitting a jaw dropping $20.1 bn in the first quarter. Apple now commands 76% of all smartphone revenue in the US.

FINSUM: Apple’s ability to compel consumers to pay exorbitant prices for its product is a sign of strength for the overall business. Imagine if the iPhone X had actually been a hit?