Through October 28th, 2011, 61 US Big High Tech Corps with Pretax Profits of at least $100 mil in any of the most recent three quarters, have reported their September 2011 Calendar 3Q Earnings.
How did they do?
Well, not really nearly as well as I had hoped for.
The Total Pretax Income of these 61 US Big High Tech Corps was $49.4 bil, an increase of 13% over the 3Q 2010. And if the truly remarkable Apple is excluded, the Total Pretax Income of the remaining 60 US Big High Tech Corps is reduced to $40.6 bil, which results in an increase of just 6% over the 3Q 2010.
But look at the following Total Earnings Growth Deceleration of these 61 US Big High Tech Corps:
Annual 2010 over Annual 2009.....+49%
1Q 2011 over 1Q 2010....................+26%
2Q 2011 over 2Q 2010....................+21%
3Q 2011 over 3Q 2010....................+13%
And this Total Earnings Growth Deceleration is even more pronounced for these 60 US Big High Tech Corps, without including Apple, as you can see below:
Annual 2010 over Annual 2009.....+49%
1Q 2011 over 1Q 2010....................+17%
2Q 2011 over 2Q 2010.....................+9%
3Q 2011 over 3Q 2010.....................+6%
How does this High Tech Earnings Growth Deceleration stack up with what happened to the largest 6 Big Oil Corps?:
......................................................61................6........Negative
................................................High Tech......Big Oil......Spread
Annual 2010 over Annual 2009..+49%.........+57%..........(8)%
1Q 2011 over 1Q 2010.................+26%.........+47%.........(21)%
2Q 2011 over 2Q 2010.................+21%.........+44%.........(23)%
3Q 2011 over 3Q 2010.................+13%.........+57%.........(44)%
And catch the absurdity of this fact.....These largest 61 US Big High Tech Corps generated Pretax Earnings in the 3Q 2011 of $49.4 bil, as compared with the largest 6 Big Oil Corps generating Pretax Earnings in the 3Q 2011 of $60.2 bil.
Yeah that's right, the 6 largest Big Oil Corps earned $10.8 bil more, or 22% more, than the 61 largest High Tech Corps that have released their 3Q Earnings so far. Ten times more largest High Tech Corps, but still 22% more Big Oil Corp profits.....Go Figure!
The US owned Big Three Oil Corps (Exxon Mobil, Chevron, and ConocoPhillips) generated more earnings ($37.2 bil) in the 3Q 2011, then did the top 9 stellar US Big High Tech Corps (Apple, Microsoft, IBM, Intel, Google, Oracle, HP, Cisco Systems, and Dell), whose comparable earnings totaled $36.8 bil.
Clearly, this is a devastatingly negative trend for the entire US economy and US job creation.
Just the opposite should be happening where the true US job creators, like the US Technology Sector, and all US small and US medium-sized businesses, should be generating the robust earnings growth, and the "Pseudo Job Creators", like the 1% Big Oil Industry, should be returning some of its windfall profits earned over the past decade to the 99%ers.
One of the main reasons for this massive Earnings Growth Deceleration in the US High Technology Sector, as well as in many other sectors, is due to the uncertainty caused by inappropriate actions by Republicans in both the US House and the US Senate. In their consistently recalcitrant, uncompromising political strategy, they stopped cold their critical Debt Ceiling Negotiations with the Obama Administration.
And they also declared dead-on-arrival the American Jobs Act, which contains many very strong job creating initiatives.
Standard & Poors had it correct when it downgraded the US Government Debt, due mainly to an uncompromising US Congress that is clearly broken, and not willing to work in the best interests of the country.
And since the most recent approval rating of the US Congress is 9%, then my hunch is that such approval rating of the US Republicans in the US Congress must be only about 5%, since they are the main drivers of this US Congressional Action to prevent desperately needed US job creation.
As one step, the US Congressional Super-Committee should right this incredible wrong by killing the tax incentives for the Pseudo Job Creators, like Big Oil Corps, US Big Financial Corps, and US Multinational Corps overdosing on shipping jobs overseas, and properly grant job-creating tax and other incentives to the true Job Creators, like all of the small and medium-sized US businesses and like the portion of the US Technology Sector that is properly reshoring jobs back to the US.
Anyway, here is the Pretax Income (PTI) of the 61 US Big High Tech Corps in the 3Q 2011, and as compared with such one-year earlier earnings:
...............................................3Q............3Q............Increase
.............................................2011.........2010........(Decrease)
............................................PTI(L).......PTI(L).....Amount......%
.............................................(in millions of dollars)......
Apple...................................8,791........5,461........3,330.....61%
Microsoft.............................7,306.......7,230.............76......1%
IBM.....................................5,027.......4,677............350......7%
Intel....................................4,892........4,251............641.....15%
Google.................................3,360.......2,714............646.....24%
Oracle..................................2,471.......1,795............676.....38%
Hewlett Packard(1)..............2,399........2,189............210.....10%
Cisco Systems(2)..................1,467.......2,418...........(951)..(39)%
Dell......................................1,091..........696............395.....57%
Accenture..............................935..........717............218.....30%
Corning..................................921..........799............122.....15%
EMC.......................................813..........638............175.....27%
Texas Instruments(3)............780........1,235..........(455)..(37)%
Applied Materials(4)..............669..........178............491....276%
Ebay......................................616..........517.............99......19%
Automatic Data Proc.............459..........436.............23.......5%
Xerox....................................367..........328.............39.....12%
Sandisk..................................363..........429...........(66)...(15)%
CA Technologies....................327..........290.............37.....13%
Agilent Technologies(5).........281..........100............181....181%
Broadcom..............................276..........336...........(60)...(18)%
Analog Devices......................275..........251.............24.....10%
Expedia.................................271..........239.............32.....13%
Thermo Fisher Scient.............265..........287...........(22)....(8)%
Symantec..............................263..........182.............81.....45%
Western Digital......................258..........211.............47.....22%
Adobe Systems......................257..........297...........(40)...(13)%
KLA Tencor...........................247..........223.............24.....11%
Motorola Solutions................237..........192.............45.....23%
Paychex.................................231..........202.............29.....14%
First Solar..............................223..........213.............10......5%
Altera....................................205..........238...........(33)...(14)%
Marvell Technology...............197..........222...........(25)...(11)%
Yahoo(6)...............................195..........223...........(28)...(13)%
VmWare................................183............97.............86.....89%
SAIC......................................182..........252...........(70)...(28)%
Nvidia...................................178.........(169)...........347...205%
NetApp..................................176..........178.............(2).....(1)%
Harris Corp............................176..........252...........(76)...(30)%
Maxim Integrated Prods........168..........175.............(7).....(4)%
Check Point Software.............168..........142.............26.....18%
BMC Software........................156..........144.............12......8%
Roper Industries...................153..........114.............39.....34%
Seagate Technology...............152..........153.............(1)....(1)%
Linear Technology................147..........189...........(42)...(22)%
Xilinx....................................146..........219...........(73)...(33)%
Flextronics............................145..........154.............(9)....(6)%
Jabil Circuit...........................141............83.............58.....70%
Amazon.com.........................130..........292..........(162)..(55)%
Cerner...................................123............94.............29.....31%
Juniper Networks..................121..........192...........(71)...(37)%
Citrix Systems.......................103............87.............16.....18%
Netflix.....................................94............65.............29.....45%
Lexmark..................................92............88..............4......5%
Lam Research..........................87..........223.........(136)..(61)%
Tech Data................................71............59.............12.....20%
Teradyne.................................57..........152...........(95)..(63)%
Novellus Systems....................55............79...........(24)..(30)%
Intuit (7)...............................(47)..........(78)............31.....40%
Micron Technology...............(78).........400.........(478).(120)%
Electronic Arts....................(380)........(218)........(162)...(74)%
Total all 61........................49,434.....43,832.......5,602.....13%
Total 60 Without Apple....40,643......38,371......2,272......6%
(1) Hewlett Packard 2010 PTI includes large restructuring charges.
(2) Cisco Systems 2011 PTI includes large restructuring charges.
(3) Texas Instruments 2011 PTI includes acquisition charge.
(4) Applied Materials 2010 PTI includes restructuring and asset impairment charges.
(5) Agilent Technologies 2010 PTI excludes gain on asset sale.
(6) Yahoo 2010 PTI excludes gain on sale of Hot Jobs.
(7) Intuit 2011 PTL excludes intangible asset charge.
