Monday, November 14, 2011

US Big Leisure and Entertainment Corps 3Q 2011 Earnings Growth Still Superb, But Decelerates a Bit

I found 29 US Big Leisure and Entertainment Corps, which had Pretax Income or Loss of at least $100 mil in the most recent quarter.

My definition of Big Leisure and Entertainment Corps is probably a bit broader than that of most people.

These 29 Big Leisure and Entertainment Corps have had a superlative earnings run in the most recent 7 quarters.

These 29 Big Leisure and Entertainment Corps generated Pretax Earnings growth of a spectacular 49% in annual 2010 over 2009.

Then, this earnings growth decelerated to a still very nice 25% in the 1Q 2011.

And then in the 2Q 2011, this earnings growth goes back into the acceleration mode to a very robust 39% growth.

So, what happens in the 3Q 2011? Well, no doubt harmed by the consumer uncertainty from the bumbling of the US Congress on both the Debt Ceiling Grand Bargain talks and the American Jobs Act, the 3Q 2011 earnings growth decelerated back down to where it was in the 1Q 2010, at 25% growth.....still very nice earnings growth.

Below here are the Pretax Income (PTI) of these 29 US Big Leisure and Entertainment Corps in the 3Q 2011, along with a comparison with the prior year’s 3Q of 2010:

...................................................(in millions of dollars).........

Walt Disney 1,903 1,434 469 33%
Carnival(1) 1,342 1,313 29 2%
Time Warner(2) 1,253 1,036 217 21%
News Corp 1,063 1,019 44 4%
DirecTV 807 756 51 7% 612 319 293 92%
CBS 574 509 65 13%
Las Vegas Sands 558 294 264 90%
Starbucks 504 413 91 22%
DISH Network(3) 498 466 32 7%
Discovery Comm 365 247 118 48%
Coach 321 285 36 13%
Expedia 271 239 32 13%
Harley Davidson 234 131 103 79%
Wynn Resorts, Ltd(4) 189 71 118 166%
Activision Blizzard 165 69 96 139%
Darden Restaurants 147 159 (12) -8%
Tiffany 131 102 29 28%
Marriott(5) 125 128 (3) -2%
Whole Foods Market 119 95 24 25%
Starwood Hotel(6) 112 62 50 81%
Intl Game Technology 99 54 45 83%
Petsmart 96 77 19 25%
Netflix 94 65 29 45%
GameStop 47 60 (13) -22%
Sothebys (58) (38) (20) -53%
MGM Resorts(7) (104) (184) 80 43%
Caesars Entertainment(8) (204) (265) 61 23%
Electronic Arts (380) (218) (162) -74%

Total all 29 10,883 8,698 2,185 25%

(1) Carnival PTI hammered by substantially higher Fuel Costs in 2011 over 2010.
(2) Time Warner 2010 PTI excludes large Loss on Debt Redemptions.
(3) DISH Network 2010 PTI excludes large Litigation Charge.
(4) Wynn Resorts, Ltd 2010 PTI excludes Loss on Debt Extinguishment.
(5) Marriott 2011 PTI excludes large Asset Impairment Charges.
(6) Starwood Hotel & Resorts PTI in both years exclude Gains and Losses on Asset Dispositions and Asset Impairments.
(7) MGM Resorts PTI in both years exclude Loss on Property Transactions.
(8) Caesars Entertainment PTI in both years exclude Asset Impairment Charges. Its 2010 PTI also excludes Gain on Debt Extinguishment.

The really curious thing is that these exceptional Big Leisure and Entertainment Corp earnings of the most recent 7 quarters has all happened mostly under the radar screen.

There is something seriously wrong with this scenario, where Big Leisure and Entertainment Corps have made out like bandits economically in the most recent 7 quarters, all on the backs of US citizen customers, most of whom are suffering economically.

It shows the dominance of Big Corps, and their lobbyists, over the common man, both working stiffs.....and those wishing to become working stiffs.

Big Corps and their lobbyists, with their awesome power, are able to convince the US Government to enact policies that are in their interests, while at the same time, they deceptively assert that these policies will trickle down and help the US economy. Pure absurdity, and also pure reckless governing by the US Government.

For instance, these Big Corps really like US Government policies such as first-year 100% tax expensing. And they even convinced the US Government that it is not necessary to put in rules that require them to hire more full-time workers in order to get this massive tax largesse, which substantially both increases their earnings and decreases their current US federal income taxes paid, but also results in a serious short-term drain to the US Treasury financial coffers.

And then these Big Corps and their lobbyists intensively push for an 85% tax free repatriation of their foreign earnings, under the disguise of saving the US economy. What pure self-serving folly.

These Big Corps say "just trust us, we know what's best for the US economy". Give me a break. The US Government, and the American people, continue to be hustled by these Big Corps and their lobbyists.

For these Big Leisure and Entertainment Corps to succeed to the maximum, they need an economic environment precisely like the present, where their employees have modest wages, where these employees are afraid to lose their jobs, and thus work extremely hard and are very loyal, and where replacement employees are readily available on the cheap.

So, under the radar screen, these Big Corps successfully convince the Republican leadership, in both the US House and the US Senate, to stop every job-creating initiative by the Obama Administration.

The Occupy Movement, and their 99% supporters, are spot on in their goal to drive economic justice. Since the US Congress has repeatedly failed to act here, it is only right for the true patriots to take to the Streets.