A very simple way to create a lot of good-paying US jobs quickly and cheaply is for the US Government to offer very robust incentives for US Big Corps to go through Corporate Spinoffs/Breakups.
When US Big Corps acquire other businesses, what always happens is a loss of many good-paying US jobs. The US Government should be much tougher on allowing these acquisitions, not just because of the resultant lack of competition, but just as importantly, because of the resultant massive job-killing result of acquisitions.
But on the other hand, when a US Big Corp spins off a segment, this always results in just the opposite situation, where many attractive US jobs are created immediately, due to the necessary additional high-quality infrastructure that is needed for the company now separately spun off.
Corporate spinoffs also have the additional advantage of unlocking the hidden value of parts of large corporations.
Further, the separately created company spun off can perform much better as a separate unit. Due to a much more intense, targeted focus on the separate unit, the spun off corp is in a much better position to grow its business and to continually create even more US jobs.
So clearly, since spinoffs of large US Corps are a substantial winner for everyone, the US Government should simply ask US Big Corps what kind of government incentives, to both the US Big Corp doing the spinoff and to the new spinoff company, they would view as very attractive to encourage more spinoffs.
Certainly, wise tax incentives would be desirable. When you think about it, a fair CBO scoring for tax incentives provided by the US Government for spinoffs should substantially more than pay for themselves.
The separate unit spun off will usually generate significantly more earnings as a separate unit, and thus the US Government will receive more US corporate income taxes.
In addition, the US government will receive more individual federal income and payroll tax receipts from the jobs created due to the spinoff.
But probably more effective than tax incentives, there are many other nontax incentives that US Big Corps would like to have in order to induce them to do more spinoffs. All you have to do is simply ask them. And I think that even reduced government regulations should be on the table.
Given the makeup of the US Congress, with so many near-sighted, one issue (debt reduction) members, it is nearly impossible to get the US Congress to pass any job creation legislation right now. Thus, I think that the Obama Administration should take it on their own and do everything in its power to offer very attractive incentives for US Big Corp spinoffs where US Congressional legislation is not needed.
The Obama Administration can't wait for the US Congress, which refuses to act on US job creation. Thus, it should offer incentives for corporate spinoffs that will do just that.
And frankly, there are so many nontax incentives US Big Corps would love to have to entice them to do Corporate Spinoffs. I could easily prepare a very long list of some. I also think if would be wise to ask each of the US Cabinet Secretary Heads, as well as other key US Government Employees, to prepare such a list for further consideration.
And US States should consider offering very attractive tax and nontax incentives to entice US Big Corps to do more spinoffs.
Also, it shouldn't just be the largest US Corps, but Corps of all sizes, that should be given these highly-charged US Government incentives to induce them to do more spinoffs.
Hundreds of new Corporate Spinoffs, creating new companies all over the country, is precisely what the country's dormant economy now needs.
Monday, December 26, 2011
Thursday, December 22, 2011
US Big Corp Annual Earnings On Fire Under Obama: Part One
In this Part One, below here is the Annual Pretax Income (PTI) for the most recent three years of all US Big Corps filing with the SEC which have fiscal year ends from February through November.
For Corps HQed in the Big 2 US States (Texas and New York), where the bulk of the extremely profitable Big Oil and Big Financial Corps are HQed, I am defining US Big Corps as ones which have Annual Pretax Income or Pretax Loss of $200 mil or more in any of the most recent three fiscal year ends.
For Corps in all of the other 48 US States, I am defining US Big Corps as ones which have Annual Pretax Income or Pretax Loss of $100 mil or more in any of the most recent three fiscal years.
As you can see below, the Obama Administration has created a robust economic environment which has permitted nearly all of these 245 US Big Corps to flat-out flourish.
There are a handful of US Big Corps which haven't released their 2011 Fiscal Year ended November 2011 annual earnings yet, and thus they weren't included in the below 245 US Big Corps.
These 245 US Big Corps generated Total Pretax Income growth of a very strong 22% in the most recent year and of a spectacular 66% in the most recent two years. Because of the widespread use of both much lower effective income tax rates and substantial stock buybacks, the equivalent Total Earnings Per Share (EPS) growth for these 245 US Big Corps for the most recent two years should be in the range of 75% to 80%.
The economic initiative that drove this robust earnings growth more than any other was the 100% first-year tax expensing of equipment. Unfortunately, this initiative did not translate into robust employment because there was no requirement that very large US businesses had to increase their full-time payroll counts to be eligible for this incredibly lucrative tax incentive. Clearly another case of the US Congress legislating for the 1% over the 99%.
..........................................................................................Obama
...........................................................................................Bump
..................................Fiscal.......................................PTI.....PTI
...................................Year...PTI.......PTI........PTI....1YR....2YR
...................................End...2011.....2010.....2009..%Chge.%Chge
.............................................(millions of dollars)
Technology
Apple.........................Sep..34,205..18,540...12,066...84%...183%
Microsoft...................Jun..28,071..25,013...19,821....12%....42%
Oracle........................May..11,411....8,243....7,834....38%....46%
Hewlett Packard(1)....Oct...10,898..10,974....9,415.....-1%.....16%
Cisco Systems............Jul.....7,825....9,415....7,693...-17%......2%
Qualcomm(2).............Sep....5,687....4,493....3,416....27%....66%
Accenture.................Aug....3,512.....2,914....2,678....21%....31%
Applied Materials.......Oct....2,378....1,387.....(486)....71%...589%
ADP...........................Jun....1,933....1,863.....1,900......4%......2%
TE Connectivity(3).....Sep....1,629....1,558......(123)......5%..1424%
CA.............................Mar....1,209....1,152.....1,049......5%....15%
KLA Tencor(4)...........Jun....1,110.......291......(156)...281%...812%
Analog Devices..........Oct.....1,061.......902......297.....18%...257%
Adobe Systems..........Nov....1,035......943......702.....10%......47%
Agilent Technol(5).....Oct.....1,032......560..........7.....84%.14643%
CSC............................Mar.......968....1,022......950.....-5%.......2%
Intuit..........................Jul.......966.......815......653.....19%.....48%
Harris Corp(6)............Jun.......881.......840......741......5%.....19%
Lam Research(7).......Jun........801.......430.....(167)...86%...580%
Netapp(8)..................Apr.......794.......447......137....78%...480%
Paychex.....................May......792.......729......812......9%.....-2%
Western Digital...........Jun.......780....1,520......501...-49%....56%
Xilinx.........................Mar.......771.......422......458....83%....68%
Symantec(9)..............Mar.......729.......865......869...-16%...-16%
Linear Technology.....Jun.......724.......490......369....48%....96%
Maxim Integr(10)......Jun.......662.......300........86...121%...670%
Flextronics(11)..........Mar.......616.......182.....(180)..238%..442%
Seagate Technol(12)...Jun.......579....1,569.....(494)..-63%..217%
Micron Technol(13)...Aug.......551....1,483...(1,852)..-63%..139%
BMC Software(14).......Mar.......531......504.......414......5%....28%
Jabil Circuit(15).........Aug.......481......247.........18....95%..2572%
Microchip Technol....Mar........461......238.......232....94%....99%
National Semicond....May.......403......269.......114....50%...254%
Amdocs.....................Sep........385......366.......418......5%.....-8%
F5 Networks..............Sep........361......238.......132....52%...173%
Skywks Solutions.......Sep........294......195........70....51%...320%
CACI Intl...................Jun........228......168......153....36%....49%
Synopsys...................Oct........219......199......233....10%.....-6%
Micros Systems.........Jun........210......168......147....25%....43%
JackHenry&Assoc.....Jun........208......181......157....15%....32%
Cree..........................Jun.........178.....205.......40...-13%...345%
Intl Rectifier(16).......Jun........158........29.....(133)..445%..219%
Compuware(17)........Mar........155......157......213.....-1%...-27%
Red Hat.....................Feb.........154.....122......122.....26%....26%
TIBCO Software.........Nov........150......111.......90.....35%....67%
Logitech...................Mar........148........84......127.....76%....17%
Qlogic.......................Mar........145......110......169.....32%...-14%
RF Micro Dev(18)......Mar.......124........85.....(260)...46%...148%
Sanmina-SCI(18A).....Sep........116......125.....(113)....-7%...203%
Scansource...............Jun.........111........76.......76.....46%....46%
Parametric Tech........Sep........105........82.......17.....28%...518%
Finisar(18B)..............Apr........101.........1.......(19).10000%.632%
LTX-Credence...........Jul..........60........18.....(137)...233%...144%
JDS Uniphase(18C)...Jun..........46......(70)....(167)...166%...128%
Aspen Tech..............Jun.........(44).....(101)......54.....56%..-181%
Electronic Arts(19)..Mar.......(279)....(706)...(487)...60%....43%
Total 56 Technology.......128,819..102,463..70,676..26%...82%
Broad-Based Manufacturing
Deere........................Oct.....4,223....3,025....1,339...40%...215%
Emerson Electric......Sep.....3,631....2,879....2,450...26%....48%
Parker Hannifin........Jun.....1,414.......755.......683...87%...107%
Joy Global................Oct........896.......679.......683...32%....31%
RockwellAutomat.....Sep.......868.......544.......274...60%...217%
Molex(20)................Jun.......430.......168.......(21)..156%.2148%
Pall Corp..................Jul........420.......328.......271...28%....55%
AVX.........................Mar.......334.......176........97...90%...244%
Nordson(21).............Oct.......315........231.......116...36%...172%
Donaldson................Jul........312.......230.......161...36%....94%
Valspar(22)..............Oct.......307.......319.......238...-4%....29%
Kennametal..............Jun.......296........77.......(12).284%.2567%
RPM Intl...................May......295......268.......181...10%....63%
Rock-Tenn(23)..........Sep.......256......266.......264...-4%.....-3%
Greif..........................Oct.......243......252.......138...-4%....76%
Woodward................Sep.......188......155.......122...21%....54%
WorthingtonInd(24).May......183......113.......(44)...62%...516%
Schnitzer Steel..........Aug.......181......125.......(47)..45%...485%
Actuant(25).............Aug.......159.......89........58....79%...174%
Acuity Brands..........Aug.......158......119.......127...33%....24%
Esterline Technol.....Oct........158......155.......118.....2%....34%
Hillenbrand..............Sep.......158......146.......161.....8%.....-2%
Brady.......................Jul........144......109........97...32%....48%
WMS Industries........Jun.......124......171.......140..-27%...-11%
Matthews..................Sep.......112......110........91......2%....23%
CarpentrTech(25A)..Jun.......112.......33..........7..239%..1500%
Kemet(26)................Mar.......104.....(22)....(103).573%...201%
Herman Miller..........May......103........35........99..194%......4%
SpectrumBrnds(27)..Sep........49......(121)........15..140%...227%
CommerclMtls(28)...Aug.........9......(205).........2..104%...350%
Totl 30 Broad-basedMfg..16,182...11,209..7,705...44%...110%
Financial
Visa.........................Sep....5,656....4,638....4,000...22%....41%
DiscovFinSvcs(29)..Nov....3,511....1,269.......229..177%.1433%
ToyotaMotorCredt..Mar...3,003....1,679...(1,052)..79%...385%
Franklin Resrcs.......Sep....2,624....2,070.....1,289...27%...104%
TD Ameritrade........Sep....1,016.......912.....1,059....11%.....-4%
H&R Block...............Apr......677......784.......839...-14%...-19%
Raymond James......Sep......451.......356.......236....27%....91%
Jeffries Group.........Nov......419.......397.......508.....6%...-18%
Eaton Vance............Oct......384.......327.......207....17%....86%
Legg Mason(30)......Mar......365.......330...(1,880)...11%...119%
Global Payments.....May......324.......310.......292.....5%....11%
Amerco...................Mar......289.......100........23..189%.1157%
Broadridge..............Jun......270.......342.......346..-21%...-22%
Factset Research.....Aug......239.......222.......212.....8%....13%
Washington Fedl......Sep......174.......123.........76...41%...129%
World Acceptance...Mar......143.......119.........92...20%....55%
Royal Gold..............Jun.......116........44.........63..164%....84%
CapitolFedFin(30A).Sep.......97.......105........105...-8%....-8%
Total 18 Financial..........19,758..14,127.....6,644..40%...197%
Health Care
Walgreens(31)........Aug....3,860...3,373...3,164....14%....22%
Medtronic(32)........Apr....3,723...3,969...3,061....-6%.....22%
Covidien Ltd...........Sep....2,216....1,926...1,807....15%....23%
McKesson(33).........Mar...1,848....1,864...1,557.....-1%....19%
Becton Dickinson.....Sep...1,716....1,661...1,579......3%......9%
Cardinal Health.......Jun....1,518....1,212...1,160....25%....31%
Forest Labs.............Mar...1,338.......951.....971....41%....38%
AmerisourceBerg....Sep....1,131....1,028.....824....10%....37%
Varian Med Syst......Sep......589.......533.....475....11%....24%
Perrigo...................Jun......451.......309.....206....46%...119%
CareFusion.............Jun......415.......341.....338....22%....23%
Patterson...............Apr......356.......339.....320......5%....11%
ResMed..................Jun......304.......261.....202....16%....50%
Hill-RomHldgs(34)..Sep.....207......162.......94....28%...120%
Cooper Cos(34A)....Oct......209......124......115....69%....82%
Steris(34B).............Mar......204......192.....166......6%....23%
Hologic(35)............Sep......172.......165.....190......4%.....-9%
Techne...................Jun......165.......156.....155......6%......6%
Myriad Genetics.....Jun......160.......141.....136....13%....18%
Coherent(35A).......Sep......124........58.....(17)..114%...829%
PSSWorldMedcl......Mar......119.......110......84......8%....42%
Haemonetics(36)....Mar......110.......97.......85....13%....29%
II-VI Inc................Jun......102........51.......46...100%...122%
Iasis HC(37)............Sep.......95.......121.....131...-21%...-27%
Biomet(38).............May.....(124)...(142)..(369)...13%....66%
Rite Aid(39)............Feb.....(546)...(480)..(773)..-14%....29%
Total 26 Health Care.....20,462..18,522..15,707...10%...30%
Retail
Costco....................Aug....2,383....2,054...1,727....16%....38%
Best Buy(40)...........Feb....2,078....2,195...1,877.....-5%....11%
Starbucks................Sep....1,811.....1,437.....560....26%...223%
Autozone...............Aug....1,324.....1,161...1,034....14%....28%
BedBath&Beyond....Feb....1,293.......985......683....31%....89%
Darden Rests..........May......648.......544......513....19%....26%
FamilyDollarStrs....Aug......617.......564......451......9%....37%
CarMax..................Feb......613........452........97....36%...532%
WholeFoodsMkt.....Sep......552........412.......251....34%...120%
Supervalu(41)........Feb......347........632......745...-45%...-53%
SallyBeautyHldgs...Sep......336........228......165.....47%...104%
Ascena Retail.........Jul.......284........209......102....36%...178%
CoPart...................Jul.......264........239.......228....10%....16%
Ruddick.................Sep......181........158.......152.....15%....19%
AmergasPrtns(42).Sep......179........171.......190......5%.....-6%
CaseysGenlStrs......Apr......151........182.......139...-17%.......9%
Jack in the Box......Sep.......126.......106.......211.....19%...-40%
99CentStrs(42A)..Mar.......118.........94.........24.....26%...392%
Cracker Barrel......Jul........116........116........90......0%.....29%
Finish Line...........Feb.......110.........72.........51.....53%...116%
Zale......................Jul......(110).....(125).....(219)...12%....50%
Total 21 Retail..............13,421...11,886....9,071...13%....48%
Foods
ArcherDanMdlnd..Jun....3,015....2,585....2,500....17%....21%
General Mills........May....2,428....2,205....1,942....10%....25%
HJ Heinz...............Apr....1,374....1,290....1,320.....7%.....4%
ConAgra Foods.....May....1,225....1,081......908....13%....35%
Campbell Soup......Jul.....1,168....1,242....1,079....-6%.....8%
Tysons Foods(43).Sep....1,074....1,203........17...-11%..6218%
Hormel Foods.......Oct.......719......625.......528....15%....36%
JM Smucker..........Apr......717......731.......396....-2%....81%
SmithfieldFds(44).Apr......636.....(215)....(382)...396%..266%
Sara Lee(45).........Jun......542......573.......462....-5%....17%
Ralcorp(46)..........Sep......400......354.......350....13%....14%
DelMnteFds(46A).Apr......360......382.......227....-6%....59%
Green Mtn Coffee..Sep......303......133.........88...128%...244%
MN-DakFrmCoop.Aug......187......101.........96....85%....95%
Lancaster Colony..Jun......162......175.......137....-7%....18%
Cal-Maine Foods...May.......92......103.......121...-11%...-24%
Sanderson Farms..Oct......(194).....207......128.-194%.-252%
Total 17 Foods..............14,208..12,775..9,917...11%....43%
Other Sectors
Procter&Gamble......Jun....15,189....15,047...14,413......1%.....5%
Walt Disney..............Sep.....8,043.....6,627.....5,658....21%....42%
News Corp(47).........Jun.....4,177.....3,323.....2,161....26%....93%
Viacom....................Sep.....3,245.....2,838.....2,417....14%....34%
Nike(48)..................May.....2,844.....2,517.....2,358....13%....21%
Mosaic(49)..............May.....2,585.....1,190.....2,233...117%....16%
Monsanto................Aug.....2,374.....1,490.....2,918....59%...-19%
FedEx(50)...............May.....2,265.....1,894.....1,577....20%....44%
JohnsnContrls(51)...Sep.....2,111......1,763......(207)...20%..1120%
Carnival..................Nov.....1,912......1,979.....1,806....-3%.....6%
Tyco Intl(52)...........Sep.....1,893......1,270.......935....49%...102%
Sysco......................Jun.....1,827......1,850.....1,771....-1%.....3%
AirProducts&Chm...Sep.....1,661.......1,394........837....19%....98%
PrecisionCstprts......Mar.....1,510......1,412.....1,575.....7%....-4%
Coach......................Jun.....1,301......1,158.......983....12%....32%
Apollo Group(53)....Aug.....1,174......1,364.....1,148...-14%.....2%
CHS.........................Aug.....1,148........584.......504....97%...128%
Estee Lauder............Jun.....1,026........688.......343....49%...199%
Avnet(54)................Jun.......871........585.......316....49%...176%
Rockwell Collins.......Sep.......855........796.......858.....7%.....0%
Brown Forman.........Apr.......829........682.......630....22%....32%
Polo Ralph Lauren....Mar......825........689.......588....20%....40%
Clorox(55)...............Jun.......821........805.......709.....2%....16%
Helmlerich&Payne....Sep......687........438.......598....57%....15%
ConstelltnBrnds(56).Feb.......551........362.......193....52%...185%
Jacobs Enginring......Sep.......517........392.......624....32%...-17%
DeVry......................Jun.......494........413.......237....20%...108%
Airgas(57)...............Mar.......450........355.......429....27%.....5%
Dolby Labs..............Mar.......441........437.......371.....1%....19%
Alliant Tech(58)......Mar.......439........473.......407....-7%.....8%
IntlGameTechn(59).Sep.......428........369.......291....16%....47%
Oshkosh(60)...........Sep.......417......1,212........12...-66%..3375%
Energizer Hldgs.......Sep.......406........543.......445...-25%....-9%
Cintas(61)...............May.......393........344.......411....14%....-4%
Aecom Technol.......Sep.......384........341.......278....13%....38%
Natl Fuel Gas(62).....Sep.......372........356.......339.....4%....10%
Education Mgt(63)...Jun.......369........297.......166....24%...122%
MSC Ind Direct........Aug.......349........241.......202....45%....73%
Towers Watson........Jun.......327........170.......222....92%....47%
Atwood Oceanics.....Sep.......325........320.......296.....2%....10%
Navistar..................Oct.......320........290.......359....10%...-11%
Atmos Energy.........Sep.......313........323.......281....-3%....11%
Transdigm(64)........Sep.......301........251.......251....20%....20%
Universal Corp........Mar......243........257.......197....-5%....23%
Triumph..................Mar......234........126.......136....86%....72%
JohnWiley&Sons.....Apr.......231........200.......164....16%....41%
Meredith(65)..........Jun.......212........167.......143....27%....48%
Cabot Corp..............Sep.......203........166.......(99)...22%...305%
ScottsMiracleGro....Sep.......195........320.......208...-39%....-6%
Toro.......................Oct.......175........141.........96.....24%....82%
HarmnIndstrs(66)..Jun.......160.........49......(211)..227%...176%
Meritor...................Sep.......159.........76.......(52)..109%...406%
AmerGreetngs(67)..Feb.......156........121........15....29%...940%
Thor Industries(68).Jul.......153........171........33...-11%...364%
AppldIndTech(69)..Jun.......153........105.......103....46%....49%
EnerSys..................Mar.......151..........87.......119....74%....27%
Tidewater...............Mar.......148........268.......492...-45%...-70%
Bally Technol.........Jun........143........171.......185...-16%...-23%
Plantronics.............Mar.......141........101........58....40%...143%
Tetra Tech..............Sep........140........123.......119....14%...18%
BuckeyeTechn(70).Jun.......129..........48........32...169%...303%
BoozAllenHamltn....Mar......128..........49......(515)..161%...125%
United Nat Foods....Jul........126........112.......100....13%....26%
Maximus.................Sep.......126........108........89....17%....42%
Unifirst...................Aug.......121........123.......126....-2%....-4%
AAR.......................May.......109.........68........90....60%....21%
CntrlGrd&Pet(70A).Sep.........48.........88.......104....-45%...-54%
DR Horton..............Sep..........12........100.....(557)..-88%...102%
Ashland..................Sep...........3..........75.....(323)..-96%...101%
Toll Brothers..........Oct........(29)......(117)....(496)...75%....94%
LionsGateEnt(70B).Mar.......(34).......(24)....(176)...-42%....81%
Shaw Group(71).....Aug........(94)......263.......227..-136%..-141%
KB Home................Nov.......(181).....(76).....(311).-138%....42%
Ciena(72)...............Oct.......(188).....(332)....(126)...43%...-49%
Beazer Homes(73)..Sep.......(197).....(193)....(330)...-2%....40%
HovnanianEnt(74).Oct.......(292).....(295)..(1,082)....1%....73%
Avaya(74A)..........Sep.......(549).....(853)....(520)...36%....-6%
Total77inOtherSectors..71,004....61,665...50,981...15%....39%
Total all 245................283,854..232,647..170,701..22%...66%
(1) Hewlett Packard 2011 PTI excludes intangible asset impairment charge, business wind down charges, and acquisition-related foreign currency exchange rate risk charge.
(2) Qualcomm 2009 PTI excludes litigation settlement charges and fine.
(3) TE Connectivity Ltd 2009 PTI excludes goodwill impairment charge.
(4) KLA Tencor 2009 PTI excludes intangible asset impairment charge.
(5) Agilent Technologies 2010 PTI excludes gain on sale of division.
(6) Harris Corp 2009 PTI excludes asset impairment charge.
(7) Lam Research 2009 PTI excludes goodwill impairment charge.
(8) Netapp 2009 PTI excludes GSA settlement charge.
(9) Symantec 2009 PTI excludes intangible asset impairment charge.
(10) Maxim Integrated Products 2009 PTI excludes asset impairment charge.
(11) Flextronics 2010 and 2009 PTI exclude asset impairment charges.
(12) Seagate Technology 2009 PTI excludes asset impairment charge.
(13) Micron Technology 2010 PTI excludes gain on acquisition.
(14) BMC Software 2009 PTI excludes in-process research and development charge.
(15) Jabil Circuit 2009 PTI excludes goodwill impairment charge.
(16) International Rectifier 2009 PTL excludes asset impairment charges and gain on divestiture.
(17) Compuware 2010 PTI excludes gain on asset sale.
(18) RF Micro Devices 2009 PTI excludes goodwill impairment charge.
(18A) Sanmina-SCI 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment.
(18B) Finisar 2011 and 2010 PTI both exclude loss on debt extinguishment. Its 2009 PTL excludes goodwill impairment charge and acquisition in-process r&d charge.
(18C) JDS Uniphase 2010 PTL excludes gain on sale of investments. Its 2009 PTL excludes goodwill impairment charge.
(19) Electronic Arts 2009 PTI excludes goodwill impairment charge.
(20) Molex 2010 and 2009 PTI excludes asset impairment charges.
(21) Nordson 2009 PTI excludes asset impairment charge.
(22) Valspar 2011 PTI excludes intangible asset impairment charge.
(23) Rock-Tenn 2011 PTI excludes loss on debt extinguishment. Both 2010 and 2009 PTI exclude alternative fuel tax credits.
(24) Worthington Industries 2010 and 2009 PTI exclude asset impairment charges.
(25) Actuant 2009 PTI excludes asset impairment charge.
(25A) Carpenter Technology numbers are for the 12 months ended September.
(26) Kemet 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment and change in value of warranty charge. Aits 2009 PTI excludes asset impairment charge, gain on asset sale, and gain on pension plan curtailment.
(27) SpectrumBrands 2011 and 2009 PTI excludes intangible asset impairment charges.
(28) Commercisl Metals 2011 PTI excludes asset impairment charge.
(29) Discover Financial Services 2009 PTI excludes antitrust litigation settlement gain.
(30) Legg Mason 2009 PTI excludes intangible asset impairment charge and includes fund support charge.
(30A) Capitol Federal Financial 2011 PTI excludes Foundation contribution.
(31) Walgreens 2011 PTI excludes gain on sale of business.
(32) Medtronic 2009 PTI excludes acquisition-related items, mostly in-process r&d charge.
(33) McKesson 2011 and 2009 PTI exclude special litigation charges.
(34) Hill-Rom Holdings 2011 PTI excludes special litigation charge. Its 2010 PTI excludes special litigation credit. Its 2009 PTI excludes intangible asset charge.
(34A) Cooper Companies 2011 PTI excludes loss on debt extinguishment.
(34B) Steris 2011 PTI excludes SYSTEM 1 Rebate Program and Class Action Settlement Charge.
(35) Hologic 2011 PTI excludes gain on sale of assets and loss on debt extinguishment. Its 2010 and 2009 PTI exclude intangible asset impairment charges.
(35A) Coherent 2009 PTI excludes goodwill impairment charge.
(36) Haemonetics 2010 PTI excludes asset impairment charge.
(37) Iasis Healthcare 2011 PTI excludes loss on debt extinguishment. Its 2009 PTI excludes goodwill impairment charge.
(38) Biomet 2011 and 2009 PTL exclude intangible asset impairment charges.
(39) Rite Aid 2009 PTL excludes goodwill impairment charge.
(40) Best Buy 2009 PTI excludes asset impairment charge.
(41) Supervalu 2011 and 2009 PTI exclude intangible asset impairment charges.
(42) Amerigas Partners 2011 PTI excludes loss on debt extinguishment. Its 2009 PTI excludes gain on asset sale.
(42A) 99 Cents Only Stores 2009 PTI excludes asset impairment charge.
(43) Tysons Foods 2009 PTI excludes goodwill impairment charge.
(44) Smithfield Foods 2011 PTI excludes gain on insurance recovery.
(45) Sara Lee 2011 PTI excludes loss on debt extinguishment. Its 2010 and 2009 PTI both exclude contingent sale proceeds credit. Its 2009 PTI also excludes asset impairment charge.
(46) Ralcorp 2011 and 2010 PTI exclude intangible asset impairment charges. Its 2009 PTI excludes gain on asset sale.
(46A) Del Monte Foods 2011 PTI excludes acquisition transaction costs.
(47) News Corp 2009 PTI excludes asset impairment charge and gain on NBS.
(48) Nike 2009 PTI excludes asset impairment charge.
(49) Mosaic 2011 and 2009 PTI both excludes gain on sale of assets.
(50) FedEx 2009 PTI excludes intangible asset impairment charge.
(51) JohnsonControls 2009 PTI excludes debt conversion costs.
(52) Tyco Intl 2009 PTI excludes intangible asset impairment charge.
(53) Apollo Group 2011 and 2010 PTI both exclude intangible asset impairment charges. Its 2010 and 2009 PTI both exclude litigation charges.
(54) Avne 2009 PTI excludes asset impairment charge.
(55) Clorox 2011 PTI excludes goodwill impairment charge.
(56) Constellation Brands 2010 and 2009 PTI exclude intangible asset impairment charges.
(57) Airgas 2011 and 2010 PTI exclude unsolicitated attempted takeover charges. Its 2010 PTI also excludes loss on debt extinguishment.
(58) Alliant Techsystems 2010 and 2009 PTI exclude intangible asset impairment charges.
(59) International Game Technology 2010 and 2009 PTI both exclude asset impairments and losses.
(60) Oshkosh 2009 PTI excludes intangible asset impairment charge.
(61) Cintas 2009 PTI excludes asset impairment charge.
(62) National Fuel Gas 2011 PTI excludes gain on sale of assets. Its 2009 PTI excludes ceiling test charge.
(63) Education Management 2010 PTI excludes loss on debt extinguishment.
(65) Transdigm 2011 PTI excludes refinancing costs charge.
(65) Meredith 2009 PTI excludes intangible asset impairment charge.
(66) Harman Industries 2009 PTI excludes goodwill impairment charge.
(67) American Greetings 2009 PTI excludes intangible asset impairment charge.
(68) Thor Industries 2009 PTI excludes intangible asset impairment charge.
(69) Applied Industrial Technologies 2009 PTI excludes goodwill impairment charge.
(70) Buckeye Technologies 2011 and 2009 PTI exclude asset impairment charges. Its 2010 and 2009 PTI exclude alternative fuel tax credits.
(70A) Central Garden & Pet 2010 PTI excludes intangible asset impairment charge.
(70B) Lions Gate Enterprise 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment.
(71) Shaw Group 2011, 2010 and 2009 PTI exclude foreign currency translation loss. Its 2011 PTI also excludes asset impairment charge.
(72) Ciena 2009 PTI excludes goodwill impairment charge.
(73) Beazer Homes 2010 and 2009 PTI both exclude gain on debt extinguishment.
(74) Hovnanian Enterprises 2009 PTI excludes gain on debt extinguishment.
(74A) Avaya 2011 PTL excludes loss on debt extinguishment. Its 2009 PTL excludes intangible asset impairment charge.
Later in Part Two, I will be showing similar information for the many more than 1,000 US Big Corps having December and January fiscal year ends. Given the much higher earnings growth of US Big Oil and US Big Financial, the overwhelming majority of which have December year ends, I expect that these much more than 1,000 additional US Big Corps which I will be including in Part Two should have Total EPS growth of much higher than the spectacular growth rates related to the above 245 US Big Corps.
EPS growth drives stock prices.
I think that through its many wise economic initiatives, the Obama Administration has driven the massive US stock market increase of the past 33 months, with the Dow Jones Industrials Index going from 6,547 on March 9, 2009 to 12,294 on Dec 23, 2011.....yeah, that's an increase of 88%.
Without these actions, I am certain that the US economy would have been headed for a deep, lengthy depression.
And the vast majority of the 1% want to now make Obama a one-term President!
That's the thanks he gets.
The Obama Administration is the only part of the US Government that is functioning effectively.
And the vast majority of the 1% thinks it's perfectly acceptable to continue to take their 1% riches to a completely higher level, even if it results in the 99% being further beaten into the ground economically.
I also think you'll see robust Total EPS growth of US Big Corps in 2012. Due mainly to 100% first year tax expensing of equipment purchases in 2011 dropping to 50% in 2012, this EPS growth will be a bit less than that spectacular EPS growth of the past two years, but it will still be very nice EPS growth. Thus I think the US stock market is headed much higher in 2012.....great for the 1%ers.
However, to have a spectacular economic year for all Americans in 2012, both the 1% and the 99%, it would be wise to step up the 50% first-year tax expensing of equipment purchases to 100% in 2012, along with additional highly-charged tax incentives for investments in new buildings, in building improvements (especially green building retrofits), in computer software, and in research and development, but also allowing these massively lucrative tax incentives to the very large US businesses only if they are accompanied by a fairly-designed minimum full-time job increase requirement.
In addition, to help both the 1% and the 99%, the country is shouting out for massive US infrastructure investments.
However, with this US Congress, which is under the control of the 1% and their lobbyists, and which has by far the lowest favorable approval rating of all time, which is richly deserved, these necessary economic initiatives are not going to happen in 2012.
The entire focus of the key Congressional point men facilitators of enhancing the economic status of only the 1%, Eric Cantor and Jeb Hensarling in the US House and Mitch McConnell and Jon Kyl in the US Senate, will continue to be to wreck the US economy for the 99%ers even more in 2012, hoping the result will be that Obama won't get reelected.
Thus the yachts of the 1% will be substantially elevated again in 2012, like they have in each year of the past decade. These 1% yachts have risen so high now that pretty soon they will be airborne.
Now if only similar wise economic initiatives are enacted to lift the boats of the 99%, that have continually submerged toward the bottom of the sea in each year of the past decade.
But since these wise economic initiatives are not going to happen in 2012, the substantial wealth gap between the 1% and the 99% will expand even more dramatically in 2012.
With the US Congress stubbornly and inhumanely continuing to ignore the 99%, I think you will see an Occupy Movement that is demonstrably more robust in 2012 than it was in 2011. I also think that the Occupy Movement will focus more intensely on members of the US Congress, who are the ones mainly responsible for creating this substantial income inequality and all of the many and massive economic injustices.
I think the only way wise economic initiatives are going to happen is for there to be a massive change in the makeup of the US Congress in November 2012, not just a switch in emphasis from the 1% to the 99%, but also many new members with extensive financial expertise, like Massachusetts US Senate Candidate Elizabeth Warren.
US Congressional members with a very high dose of financial savvy are needed to solve the many extremely complex financial issues facing the country. Unfortunately, this critical trait is now so lacking in the US Congress in these very troubled economic times.
This substantial reconfiguration of the US Congress in the November 2012 election would have the potential to make America great again.
============================================
Jan 2012 Late Additions to Above List of 245 US Big Corps
..........................................................................................Obama
...........................................................................................Bump
..................................Fiscal.......................................PTI.....PTI
...................................Year...PTI.......PTI........PTI....1YR....2YR
...................................End...2011.....2010.....2009..%Chge.%Chge
.............................................(millions of dollars)
GT Advanced Tech......Mar....271.....140.........142.....94%.....91%
THQ............................Mar...(135)....(12).......(268).-1025%..50%
Omnivision Tech..........Apr.....129......10.........(30)...1190%.530%
CorinthianColleges(A).Jun....117......241........117.....-51%......0%
Brooks Automation(B).Sep.....83.......56........(119)....48%....170%
Kulicke & Soffa...........Sep.....162......140........(77).....16%...310%
Westco Aircraft..........Sep.....128......118..........96........8%....33%
Cubic Corp.................Sep.....118......106..........85.......11%....39%
Aramark.....................Sep......122.......33.........(24)...270%...608%
Brocade Comm(C)......Oct.......92......107.........27....-14%...241%
Heico..........................Oct.....138......109.........88.....27%.....57%
Synnex.......................Nov....230......184........135.....25%....70%
Lennar.......................Nov......98........95.......(760).....3%...113%
HB Fuller....................Nov....124........96........120......29%.....3%
Clarcor.......................Nov....181.......143........106.....27%....71%
McCormick................Nov.....491......463........417.......6%....18%
Intl Speedway............Nov.....114........75..........48.....52%...138%
Levi Strauss...............Nov.....203......236.........190....-14%.....7%
IHS............................Nov.....162.......173.........159.....-6%......2%
(A) Corinthian Colleges 2011 PTI excludes goodwill impairment charge.
(B) Brooks Automation 2009 PTI excludes asset impairment charges.
(C) Brocade Communication Systems 2011 PTI excludes loss on sale of subsidiary. Its 2009 PTI excludes special litigation charge, in process research & development charge, and intangible asset impairment charge.
For Corps HQed in the Big 2 US States (Texas and New York), where the bulk of the extremely profitable Big Oil and Big Financial Corps are HQed, I am defining US Big Corps as ones which have Annual Pretax Income or Pretax Loss of $200 mil or more in any of the most recent three fiscal year ends.
For Corps in all of the other 48 US States, I am defining US Big Corps as ones which have Annual Pretax Income or Pretax Loss of $100 mil or more in any of the most recent three fiscal years.
As you can see below, the Obama Administration has created a robust economic environment which has permitted nearly all of these 245 US Big Corps to flat-out flourish.
There are a handful of US Big Corps which haven't released their 2011 Fiscal Year ended November 2011 annual earnings yet, and thus they weren't included in the below 245 US Big Corps.
These 245 US Big Corps generated Total Pretax Income growth of a very strong 22% in the most recent year and of a spectacular 66% in the most recent two years. Because of the widespread use of both much lower effective income tax rates and substantial stock buybacks, the equivalent Total Earnings Per Share (EPS) growth for these 245 US Big Corps for the most recent two years should be in the range of 75% to 80%.
The economic initiative that drove this robust earnings growth more than any other was the 100% first-year tax expensing of equipment. Unfortunately, this initiative did not translate into robust employment because there was no requirement that very large US businesses had to increase their full-time payroll counts to be eligible for this incredibly lucrative tax incentive. Clearly another case of the US Congress legislating for the 1% over the 99%.
..........................................................................................Obama
...........................................................................................Bump
..................................Fiscal.......................................PTI.....PTI
...................................Year...PTI.......PTI........PTI....1YR....2YR
...................................End...2011.....2010.....2009..%Chge.%Chge
.............................................(millions of dollars)
Technology
Apple.........................Sep..34,205..18,540...12,066...84%...183%
Microsoft...................Jun..28,071..25,013...19,821....12%....42%
Oracle........................May..11,411....8,243....7,834....38%....46%
Hewlett Packard(1)....Oct...10,898..10,974....9,415.....-1%.....16%
Cisco Systems............Jul.....7,825....9,415....7,693...-17%......2%
Qualcomm(2).............Sep....5,687....4,493....3,416....27%....66%
Accenture.................Aug....3,512.....2,914....2,678....21%....31%
Applied Materials.......Oct....2,378....1,387.....(486)....71%...589%
ADP...........................Jun....1,933....1,863.....1,900......4%......2%
TE Connectivity(3).....Sep....1,629....1,558......(123)......5%..1424%
CA.............................Mar....1,209....1,152.....1,049......5%....15%
KLA Tencor(4)...........Jun....1,110.......291......(156)...281%...812%
Analog Devices..........Oct.....1,061.......902......297.....18%...257%
Adobe Systems..........Nov....1,035......943......702.....10%......47%
Agilent Technol(5).....Oct.....1,032......560..........7.....84%.14643%
CSC............................Mar.......968....1,022......950.....-5%.......2%
Intuit..........................Jul.......966.......815......653.....19%.....48%
Harris Corp(6)............Jun.......881.......840......741......5%.....19%
Lam Research(7).......Jun........801.......430.....(167)...86%...580%
Netapp(8)..................Apr.......794.......447......137....78%...480%
Paychex.....................May......792.......729......812......9%.....-2%
Western Digital...........Jun.......780....1,520......501...-49%....56%
Xilinx.........................Mar.......771.......422......458....83%....68%
Symantec(9)..............Mar.......729.......865......869...-16%...-16%
Linear Technology.....Jun.......724.......490......369....48%....96%
Maxim Integr(10)......Jun.......662.......300........86...121%...670%
Flextronics(11)..........Mar.......616.......182.....(180)..238%..442%
Seagate Technol(12)...Jun.......579....1,569.....(494)..-63%..217%
Micron Technol(13)...Aug.......551....1,483...(1,852)..-63%..139%
BMC Software(14).......Mar.......531......504.......414......5%....28%
Jabil Circuit(15).........Aug.......481......247.........18....95%..2572%
Microchip Technol....Mar........461......238.......232....94%....99%
National Semicond....May.......403......269.......114....50%...254%
Amdocs.....................Sep........385......366.......418......5%.....-8%
F5 Networks..............Sep........361......238.......132....52%...173%
Skywks Solutions.......Sep........294......195........70....51%...320%
CACI Intl...................Jun........228......168......153....36%....49%
Synopsys...................Oct........219......199......233....10%.....-6%
Micros Systems.........Jun........210......168......147....25%....43%
JackHenry&Assoc.....Jun........208......181......157....15%....32%
Cree..........................Jun.........178.....205.......40...-13%...345%
Intl Rectifier(16).......Jun........158........29.....(133)..445%..219%
Compuware(17)........Mar........155......157......213.....-1%...-27%
Red Hat.....................Feb.........154.....122......122.....26%....26%
TIBCO Software.........Nov........150......111.......90.....35%....67%
Logitech...................Mar........148........84......127.....76%....17%
Qlogic.......................Mar........145......110......169.....32%...-14%
RF Micro Dev(18)......Mar.......124........85.....(260)...46%...148%
Sanmina-SCI(18A).....Sep........116......125.....(113)....-7%...203%
Scansource...............Jun.........111........76.......76.....46%....46%
Parametric Tech........Sep........105........82.......17.....28%...518%
Finisar(18B)..............Apr........101.........1.......(19).10000%.632%
LTX-Credence...........Jul..........60........18.....(137)...233%...144%
JDS Uniphase(18C)...Jun..........46......(70)....(167)...166%...128%
Aspen Tech..............Jun.........(44).....(101)......54.....56%..-181%
Electronic Arts(19)..Mar.......(279)....(706)...(487)...60%....43%
Total 56 Technology.......128,819..102,463..70,676..26%...82%
Broad-Based Manufacturing
Deere........................Oct.....4,223....3,025....1,339...40%...215%
Emerson Electric......Sep.....3,631....2,879....2,450...26%....48%
Parker Hannifin........Jun.....1,414.......755.......683...87%...107%
Joy Global................Oct........896.......679.......683...32%....31%
RockwellAutomat.....Sep.......868.......544.......274...60%...217%
Molex(20)................Jun.......430.......168.......(21)..156%.2148%
Pall Corp..................Jul........420.......328.......271...28%....55%
AVX.........................Mar.......334.......176........97...90%...244%
Nordson(21).............Oct.......315........231.......116...36%...172%
Donaldson................Jul........312.......230.......161...36%....94%
Valspar(22)..............Oct.......307.......319.......238...-4%....29%
Kennametal..............Jun.......296........77.......(12).284%.2567%
RPM Intl...................May......295......268.......181...10%....63%
Rock-Tenn(23)..........Sep.......256......266.......264...-4%.....-3%
Greif..........................Oct.......243......252.......138...-4%....76%
Woodward................Sep.......188......155.......122...21%....54%
WorthingtonInd(24).May......183......113.......(44)...62%...516%
Schnitzer Steel..........Aug.......181......125.......(47)..45%...485%
Actuant(25).............Aug.......159.......89........58....79%...174%
Acuity Brands..........Aug.......158......119.......127...33%....24%
Esterline Technol.....Oct........158......155.......118.....2%....34%
Hillenbrand..............Sep.......158......146.......161.....8%.....-2%
Brady.......................Jul........144......109........97...32%....48%
WMS Industries........Jun.......124......171.......140..-27%...-11%
Matthews..................Sep.......112......110........91......2%....23%
CarpentrTech(25A)..Jun.......112.......33..........7..239%..1500%
Kemet(26)................Mar.......104.....(22)....(103).573%...201%
Herman Miller..........May......103........35........99..194%......4%
SpectrumBrnds(27)..Sep........49......(121)........15..140%...227%
CommerclMtls(28)...Aug.........9......(205).........2..104%...350%
Totl 30 Broad-basedMfg..16,182...11,209..7,705...44%...110%
Financial
Visa.........................Sep....5,656....4,638....4,000...22%....41%
DiscovFinSvcs(29)..Nov....3,511....1,269.......229..177%.1433%
ToyotaMotorCredt..Mar...3,003....1,679...(1,052)..79%...385%
Franklin Resrcs.......Sep....2,624....2,070.....1,289...27%...104%
TD Ameritrade........Sep....1,016.......912.....1,059....11%.....-4%
H&R Block...............Apr......677......784.......839...-14%...-19%
Raymond James......Sep......451.......356.......236....27%....91%
Jeffries Group.........Nov......419.......397.......508.....6%...-18%
Eaton Vance............Oct......384.......327.......207....17%....86%
Legg Mason(30)......Mar......365.......330...(1,880)...11%...119%
Global Payments.....May......324.......310.......292.....5%....11%
Amerco...................Mar......289.......100........23..189%.1157%
Broadridge..............Jun......270.......342.......346..-21%...-22%
Factset Research.....Aug......239.......222.......212.....8%....13%
Washington Fedl......Sep......174.......123.........76...41%...129%
World Acceptance...Mar......143.......119.........92...20%....55%
Royal Gold..............Jun.......116........44.........63..164%....84%
CapitolFedFin(30A).Sep.......97.......105........105...-8%....-8%
Total 18 Financial..........19,758..14,127.....6,644..40%...197%
Health Care
Walgreens(31)........Aug....3,860...3,373...3,164....14%....22%
Medtronic(32)........Apr....3,723...3,969...3,061....-6%.....22%
Covidien Ltd...........Sep....2,216....1,926...1,807....15%....23%
McKesson(33).........Mar...1,848....1,864...1,557.....-1%....19%
Becton Dickinson.....Sep...1,716....1,661...1,579......3%......9%
Cardinal Health.......Jun....1,518....1,212...1,160....25%....31%
Forest Labs.............Mar...1,338.......951.....971....41%....38%
AmerisourceBerg....Sep....1,131....1,028.....824....10%....37%
Varian Med Syst......Sep......589.......533.....475....11%....24%
Perrigo...................Jun......451.......309.....206....46%...119%
CareFusion.............Jun......415.......341.....338....22%....23%
Patterson...............Apr......356.......339.....320......5%....11%
ResMed..................Jun......304.......261.....202....16%....50%
Hill-RomHldgs(34)..Sep.....207......162.......94....28%...120%
Cooper Cos(34A)....Oct......209......124......115....69%....82%
Steris(34B).............Mar......204......192.....166......6%....23%
Hologic(35)............Sep......172.......165.....190......4%.....-9%
Techne...................Jun......165.......156.....155......6%......6%
Myriad Genetics.....Jun......160.......141.....136....13%....18%
Coherent(35A).......Sep......124........58.....(17)..114%...829%
PSSWorldMedcl......Mar......119.......110......84......8%....42%
Haemonetics(36)....Mar......110.......97.......85....13%....29%
II-VI Inc................Jun......102........51.......46...100%...122%
Iasis HC(37)............Sep.......95.......121.....131...-21%...-27%
Biomet(38).............May.....(124)...(142)..(369)...13%....66%
Rite Aid(39)............Feb.....(546)...(480)..(773)..-14%....29%
Total 26 Health Care.....20,462..18,522..15,707...10%...30%
Retail
Costco....................Aug....2,383....2,054...1,727....16%....38%
Best Buy(40)...........Feb....2,078....2,195...1,877.....-5%....11%
Starbucks................Sep....1,811.....1,437.....560....26%...223%
Autozone...............Aug....1,324.....1,161...1,034....14%....28%
BedBath&Beyond....Feb....1,293.......985......683....31%....89%
Darden Rests..........May......648.......544......513....19%....26%
FamilyDollarStrs....Aug......617.......564......451......9%....37%
CarMax..................Feb......613........452........97....36%...532%
WholeFoodsMkt.....Sep......552........412.......251....34%...120%
Supervalu(41)........Feb......347........632......745...-45%...-53%
SallyBeautyHldgs...Sep......336........228......165.....47%...104%
Ascena Retail.........Jul.......284........209......102....36%...178%
CoPart...................Jul.......264........239.......228....10%....16%
Ruddick.................Sep......181........158.......152.....15%....19%
AmergasPrtns(42).Sep......179........171.......190......5%.....-6%
CaseysGenlStrs......Apr......151........182.......139...-17%.......9%
Jack in the Box......Sep.......126.......106.......211.....19%...-40%
99CentStrs(42A)..Mar.......118.........94.........24.....26%...392%
Cracker Barrel......Jul........116........116........90......0%.....29%
Finish Line...........Feb.......110.........72.........51.....53%...116%
Zale......................Jul......(110).....(125).....(219)...12%....50%
Total 21 Retail..............13,421...11,886....9,071...13%....48%
Foods
ArcherDanMdlnd..Jun....3,015....2,585....2,500....17%....21%
General Mills........May....2,428....2,205....1,942....10%....25%
HJ Heinz...............Apr....1,374....1,290....1,320.....7%.....4%
ConAgra Foods.....May....1,225....1,081......908....13%....35%
Campbell Soup......Jul.....1,168....1,242....1,079....-6%.....8%
Tysons Foods(43).Sep....1,074....1,203........17...-11%..6218%
Hormel Foods.......Oct.......719......625.......528....15%....36%
JM Smucker..........Apr......717......731.......396....-2%....81%
SmithfieldFds(44).Apr......636.....(215)....(382)...396%..266%
Sara Lee(45).........Jun......542......573.......462....-5%....17%
Ralcorp(46)..........Sep......400......354.......350....13%....14%
DelMnteFds(46A).Apr......360......382.......227....-6%....59%
Green Mtn Coffee..Sep......303......133.........88...128%...244%
MN-DakFrmCoop.Aug......187......101.........96....85%....95%
Lancaster Colony..Jun......162......175.......137....-7%....18%
Cal-Maine Foods...May.......92......103.......121...-11%...-24%
Sanderson Farms..Oct......(194).....207......128.-194%.-252%
Total 17 Foods..............14,208..12,775..9,917...11%....43%
Other Sectors
Procter&Gamble......Jun....15,189....15,047...14,413......1%.....5%
Walt Disney..............Sep.....8,043.....6,627.....5,658....21%....42%
News Corp(47).........Jun.....4,177.....3,323.....2,161....26%....93%
Viacom....................Sep.....3,245.....2,838.....2,417....14%....34%
Nike(48)..................May.....2,844.....2,517.....2,358....13%....21%
Mosaic(49)..............May.....2,585.....1,190.....2,233...117%....16%
Monsanto................Aug.....2,374.....1,490.....2,918....59%...-19%
FedEx(50)...............May.....2,265.....1,894.....1,577....20%....44%
JohnsnContrls(51)...Sep.....2,111......1,763......(207)...20%..1120%
Carnival..................Nov.....1,912......1,979.....1,806....-3%.....6%
Tyco Intl(52)...........Sep.....1,893......1,270.......935....49%...102%
Sysco......................Jun.....1,827......1,850.....1,771....-1%.....3%
AirProducts&Chm...Sep.....1,661.......1,394........837....19%....98%
PrecisionCstprts......Mar.....1,510......1,412.....1,575.....7%....-4%
Coach......................Jun.....1,301......1,158.......983....12%....32%
Apollo Group(53)....Aug.....1,174......1,364.....1,148...-14%.....2%
CHS.........................Aug.....1,148........584.......504....97%...128%
Estee Lauder............Jun.....1,026........688.......343....49%...199%
Avnet(54)................Jun.......871........585.......316....49%...176%
Rockwell Collins.......Sep.......855........796.......858.....7%.....0%
Brown Forman.........Apr.......829........682.......630....22%....32%
Polo Ralph Lauren....Mar......825........689.......588....20%....40%
Clorox(55)...............Jun.......821........805.......709.....2%....16%
Helmlerich&Payne....Sep......687........438.......598....57%....15%
ConstelltnBrnds(56).Feb.......551........362.......193....52%...185%
Jacobs Enginring......Sep.......517........392.......624....32%...-17%
DeVry......................Jun.......494........413.......237....20%...108%
Airgas(57)...............Mar.......450........355.......429....27%.....5%
Dolby Labs..............Mar.......441........437.......371.....1%....19%
Alliant Tech(58)......Mar.......439........473.......407....-7%.....8%
IntlGameTechn(59).Sep.......428........369.......291....16%....47%
Oshkosh(60)...........Sep.......417......1,212........12...-66%..3375%
Energizer Hldgs.......Sep.......406........543.......445...-25%....-9%
Cintas(61)...............May.......393........344.......411....14%....-4%
Aecom Technol.......Sep.......384........341.......278....13%....38%
Natl Fuel Gas(62).....Sep.......372........356.......339.....4%....10%
Education Mgt(63)...Jun.......369........297.......166....24%...122%
MSC Ind Direct........Aug.......349........241.......202....45%....73%
Towers Watson........Jun.......327........170.......222....92%....47%
Atwood Oceanics.....Sep.......325........320.......296.....2%....10%
Navistar..................Oct.......320........290.......359....10%...-11%
Atmos Energy.........Sep.......313........323.......281....-3%....11%
Transdigm(64)........Sep.......301........251.......251....20%....20%
Universal Corp........Mar......243........257.......197....-5%....23%
Triumph..................Mar......234........126.......136....86%....72%
JohnWiley&Sons.....Apr.......231........200.......164....16%....41%
Meredith(65)..........Jun.......212........167.......143....27%....48%
Cabot Corp..............Sep.......203........166.......(99)...22%...305%
ScottsMiracleGro....Sep.......195........320.......208...-39%....-6%
Toro.......................Oct.......175........141.........96.....24%....82%
HarmnIndstrs(66)..Jun.......160.........49......(211)..227%...176%
Meritor...................Sep.......159.........76.......(52)..109%...406%
AmerGreetngs(67)..Feb.......156........121........15....29%...940%
Thor Industries(68).Jul.......153........171........33...-11%...364%
AppldIndTech(69)..Jun.......153........105.......103....46%....49%
EnerSys..................Mar.......151..........87.......119....74%....27%
Tidewater...............Mar.......148........268.......492...-45%...-70%
Bally Technol.........Jun........143........171.......185...-16%...-23%
Plantronics.............Mar.......141........101........58....40%...143%
Tetra Tech..............Sep........140........123.......119....14%...18%
BuckeyeTechn(70).Jun.......129..........48........32...169%...303%
BoozAllenHamltn....Mar......128..........49......(515)..161%...125%
United Nat Foods....Jul........126........112.......100....13%....26%
Maximus.................Sep.......126........108........89....17%....42%
Unifirst...................Aug.......121........123.......126....-2%....-4%
AAR.......................May.......109.........68........90....60%....21%
CntrlGrd&Pet(70A).Sep.........48.........88.......104....-45%...-54%
DR Horton..............Sep..........12........100.....(557)..-88%...102%
Ashland..................Sep...........3..........75.....(323)..-96%...101%
Toll Brothers..........Oct........(29)......(117)....(496)...75%....94%
LionsGateEnt(70B).Mar.......(34).......(24)....(176)...-42%....81%
Shaw Group(71).....Aug........(94)......263.......227..-136%..-141%
KB Home................Nov.......(181).....(76).....(311).-138%....42%
Ciena(72)...............Oct.......(188).....(332)....(126)...43%...-49%
Beazer Homes(73)..Sep.......(197).....(193)....(330)...-2%....40%
HovnanianEnt(74).Oct.......(292).....(295)..(1,082)....1%....73%
Avaya(74A)..........Sep.......(549).....(853)....(520)...36%....-6%
Total77inOtherSectors..71,004....61,665...50,981...15%....39%
Total all 245................283,854..232,647..170,701..22%...66%
(1) Hewlett Packard 2011 PTI excludes intangible asset impairment charge, business wind down charges, and acquisition-related foreign currency exchange rate risk charge.
(2) Qualcomm 2009 PTI excludes litigation settlement charges and fine.
(3) TE Connectivity Ltd 2009 PTI excludes goodwill impairment charge.
(4) KLA Tencor 2009 PTI excludes intangible asset impairment charge.
(5) Agilent Technologies 2010 PTI excludes gain on sale of division.
(6) Harris Corp 2009 PTI excludes asset impairment charge.
(7) Lam Research 2009 PTI excludes goodwill impairment charge.
(8) Netapp 2009 PTI excludes GSA settlement charge.
(9) Symantec 2009 PTI excludes intangible asset impairment charge.
(10) Maxim Integrated Products 2009 PTI excludes asset impairment charge.
(11) Flextronics 2010 and 2009 PTI exclude asset impairment charges.
(12) Seagate Technology 2009 PTI excludes asset impairment charge.
(13) Micron Technology 2010 PTI excludes gain on acquisition.
(14) BMC Software 2009 PTI excludes in-process research and development charge.
(15) Jabil Circuit 2009 PTI excludes goodwill impairment charge.
(16) International Rectifier 2009 PTL excludes asset impairment charges and gain on divestiture.
(17) Compuware 2010 PTI excludes gain on asset sale.
(18) RF Micro Devices 2009 PTI excludes goodwill impairment charge.
(18A) Sanmina-SCI 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment.
(18B) Finisar 2011 and 2010 PTI both exclude loss on debt extinguishment. Its 2009 PTL excludes goodwill impairment charge and acquisition in-process r&d charge.
(18C) JDS Uniphase 2010 PTL excludes gain on sale of investments. Its 2009 PTL excludes goodwill impairment charge.
(19) Electronic Arts 2009 PTI excludes goodwill impairment charge.
(20) Molex 2010 and 2009 PTI excludes asset impairment charges.
(21) Nordson 2009 PTI excludes asset impairment charge.
(22) Valspar 2011 PTI excludes intangible asset impairment charge.
(23) Rock-Tenn 2011 PTI excludes loss on debt extinguishment. Both 2010 and 2009 PTI exclude alternative fuel tax credits.
(24) Worthington Industries 2010 and 2009 PTI exclude asset impairment charges.
(25) Actuant 2009 PTI excludes asset impairment charge.
(25A) Carpenter Technology numbers are for the 12 months ended September.
(26) Kemet 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment and change in value of warranty charge. Aits 2009 PTI excludes asset impairment charge, gain on asset sale, and gain on pension plan curtailment.
(27) SpectrumBrands 2011 and 2009 PTI excludes intangible asset impairment charges.
(28) Commercisl Metals 2011 PTI excludes asset impairment charge.
(29) Discover Financial Services 2009 PTI excludes antitrust litigation settlement gain.
(30) Legg Mason 2009 PTI excludes intangible asset impairment charge and includes fund support charge.
(30A) Capitol Federal Financial 2011 PTI excludes Foundation contribution.
(31) Walgreens 2011 PTI excludes gain on sale of business.
(32) Medtronic 2009 PTI excludes acquisition-related items, mostly in-process r&d charge.
(33) McKesson 2011 and 2009 PTI exclude special litigation charges.
(34) Hill-Rom Holdings 2011 PTI excludes special litigation charge. Its 2010 PTI excludes special litigation credit. Its 2009 PTI excludes intangible asset charge.
(34A) Cooper Companies 2011 PTI excludes loss on debt extinguishment.
(34B) Steris 2011 PTI excludes SYSTEM 1 Rebate Program and Class Action Settlement Charge.
(35) Hologic 2011 PTI excludes gain on sale of assets and loss on debt extinguishment. Its 2010 and 2009 PTI exclude intangible asset impairment charges.
(35A) Coherent 2009 PTI excludes goodwill impairment charge.
(36) Haemonetics 2010 PTI excludes asset impairment charge.
(37) Iasis Healthcare 2011 PTI excludes loss on debt extinguishment. Its 2009 PTI excludes goodwill impairment charge.
(38) Biomet 2011 and 2009 PTL exclude intangible asset impairment charges.
(39) Rite Aid 2009 PTL excludes goodwill impairment charge.
(40) Best Buy 2009 PTI excludes asset impairment charge.
(41) Supervalu 2011 and 2009 PTI exclude intangible asset impairment charges.
(42) Amerigas Partners 2011 PTI excludes loss on debt extinguishment. Its 2009 PTI excludes gain on asset sale.
(42A) 99 Cents Only Stores 2009 PTI excludes asset impairment charge.
(43) Tysons Foods 2009 PTI excludes goodwill impairment charge.
(44) Smithfield Foods 2011 PTI excludes gain on insurance recovery.
(45) Sara Lee 2011 PTI excludes loss on debt extinguishment. Its 2010 and 2009 PTI both exclude contingent sale proceeds credit. Its 2009 PTI also excludes asset impairment charge.
(46) Ralcorp 2011 and 2010 PTI exclude intangible asset impairment charges. Its 2009 PTI excludes gain on asset sale.
(46A) Del Monte Foods 2011 PTI excludes acquisition transaction costs.
(47) News Corp 2009 PTI excludes asset impairment charge and gain on NBS.
(48) Nike 2009 PTI excludes asset impairment charge.
(49) Mosaic 2011 and 2009 PTI both excludes gain on sale of assets.
(50) FedEx 2009 PTI excludes intangible asset impairment charge.
(51) JohnsonControls 2009 PTI excludes debt conversion costs.
(52) Tyco Intl 2009 PTI excludes intangible asset impairment charge.
(53) Apollo Group 2011 and 2010 PTI both exclude intangible asset impairment charges. Its 2010 and 2009 PTI both exclude litigation charges.
(54) Avne 2009 PTI excludes asset impairment charge.
(55) Clorox 2011 PTI excludes goodwill impairment charge.
(56) Constellation Brands 2010 and 2009 PTI exclude intangible asset impairment charges.
(57) Airgas 2011 and 2010 PTI exclude unsolicitated attempted takeover charges. Its 2010 PTI also excludes loss on debt extinguishment.
(58) Alliant Techsystems 2010 and 2009 PTI exclude intangible asset impairment charges.
(59) International Game Technology 2010 and 2009 PTI both exclude asset impairments and losses.
(60) Oshkosh 2009 PTI excludes intangible asset impairment charge.
(61) Cintas 2009 PTI excludes asset impairment charge.
(62) National Fuel Gas 2011 PTI excludes gain on sale of assets. Its 2009 PTI excludes ceiling test charge.
(63) Education Management 2010 PTI excludes loss on debt extinguishment.
(65) Transdigm 2011 PTI excludes refinancing costs charge.
(65) Meredith 2009 PTI excludes intangible asset impairment charge.
(66) Harman Industries 2009 PTI excludes goodwill impairment charge.
(67) American Greetings 2009 PTI excludes intangible asset impairment charge.
(68) Thor Industries 2009 PTI excludes intangible asset impairment charge.
(69) Applied Industrial Technologies 2009 PTI excludes goodwill impairment charge.
(70) Buckeye Technologies 2011 and 2009 PTI exclude asset impairment charges. Its 2010 and 2009 PTI exclude alternative fuel tax credits.
(70A) Central Garden & Pet 2010 PTI excludes intangible asset impairment charge.
(70B) Lions Gate Enterprise 2011 PTI excludes loss on debt extinguishment. Its 2010 PTI excludes gain on debt extinguishment.
(71) Shaw Group 2011, 2010 and 2009 PTI exclude foreign currency translation loss. Its 2011 PTI also excludes asset impairment charge.
(72) Ciena 2009 PTI excludes goodwill impairment charge.
(73) Beazer Homes 2010 and 2009 PTI both exclude gain on debt extinguishment.
(74) Hovnanian Enterprises 2009 PTI excludes gain on debt extinguishment.
(74A) Avaya 2011 PTL excludes loss on debt extinguishment. Its 2009 PTL excludes intangible asset impairment charge.
Later in Part Two, I will be showing similar information for the many more than 1,000 US Big Corps having December and January fiscal year ends. Given the much higher earnings growth of US Big Oil and US Big Financial, the overwhelming majority of which have December year ends, I expect that these much more than 1,000 additional US Big Corps which I will be including in Part Two should have Total EPS growth of much higher than the spectacular growth rates related to the above 245 US Big Corps.
EPS growth drives stock prices.
I think that through its many wise economic initiatives, the Obama Administration has driven the massive US stock market increase of the past 33 months, with the Dow Jones Industrials Index going from 6,547 on March 9, 2009 to 12,294 on Dec 23, 2011.....yeah, that's an increase of 88%.
Without these actions, I am certain that the US economy would have been headed for a deep, lengthy depression.
And the vast majority of the 1% want to now make Obama a one-term President!
That's the thanks he gets.
The Obama Administration is the only part of the US Government that is functioning effectively.
And the vast majority of the 1% thinks it's perfectly acceptable to continue to take their 1% riches to a completely higher level, even if it results in the 99% being further beaten into the ground economically.
I also think you'll see robust Total EPS growth of US Big Corps in 2012. Due mainly to 100% first year tax expensing of equipment purchases in 2011 dropping to 50% in 2012, this EPS growth will be a bit less than that spectacular EPS growth of the past two years, but it will still be very nice EPS growth. Thus I think the US stock market is headed much higher in 2012.....great for the 1%ers.
However, to have a spectacular economic year for all Americans in 2012, both the 1% and the 99%, it would be wise to step up the 50% first-year tax expensing of equipment purchases to 100% in 2012, along with additional highly-charged tax incentives for investments in new buildings, in building improvements (especially green building retrofits), in computer software, and in research and development, but also allowing these massively lucrative tax incentives to the very large US businesses only if they are accompanied by a fairly-designed minimum full-time job increase requirement.
In addition, to help both the 1% and the 99%, the country is shouting out for massive US infrastructure investments.
However, with this US Congress, which is under the control of the 1% and their lobbyists, and which has by far the lowest favorable approval rating of all time, which is richly deserved, these necessary economic initiatives are not going to happen in 2012.
The entire focus of the key Congressional point men facilitators of enhancing the economic status of only the 1%, Eric Cantor and Jeb Hensarling in the US House and Mitch McConnell and Jon Kyl in the US Senate, will continue to be to wreck the US economy for the 99%ers even more in 2012, hoping the result will be that Obama won't get reelected.
Thus the yachts of the 1% will be substantially elevated again in 2012, like they have in each year of the past decade. These 1% yachts have risen so high now that pretty soon they will be airborne.
Now if only similar wise economic initiatives are enacted to lift the boats of the 99%, that have continually submerged toward the bottom of the sea in each year of the past decade.
But since these wise economic initiatives are not going to happen in 2012, the substantial wealth gap between the 1% and the 99% will expand even more dramatically in 2012.
With the US Congress stubbornly and inhumanely continuing to ignore the 99%, I think you will see an Occupy Movement that is demonstrably more robust in 2012 than it was in 2011. I also think that the Occupy Movement will focus more intensely on members of the US Congress, who are the ones mainly responsible for creating this substantial income inequality and all of the many and massive economic injustices.
I think the only way wise economic initiatives are going to happen is for there to be a massive change in the makeup of the US Congress in November 2012, not just a switch in emphasis from the 1% to the 99%, but also many new members with extensive financial expertise, like Massachusetts US Senate Candidate Elizabeth Warren.
US Congressional members with a very high dose of financial savvy are needed to solve the many extremely complex financial issues facing the country. Unfortunately, this critical trait is now so lacking in the US Congress in these very troubled economic times.
This substantial reconfiguration of the US Congress in the November 2012 election would have the potential to make America great again.
============================================
Jan 2012 Late Additions to Above List of 245 US Big Corps
..........................................................................................Obama
...........................................................................................Bump
..................................Fiscal.......................................PTI.....PTI
...................................Year...PTI.......PTI........PTI....1YR....2YR
...................................End...2011.....2010.....2009..%Chge.%Chge
.............................................(millions of dollars)
GT Advanced Tech......Mar....271.....140.........142.....94%.....91%
THQ............................Mar...(135)....(12).......(268).-1025%..50%
Omnivision Tech..........Apr.....129......10.........(30)...1190%.530%
CorinthianColleges(A).Jun....117......241........117.....-51%......0%
Brooks Automation(B).Sep.....83.......56........(119)....48%....170%
Kulicke & Soffa...........Sep.....162......140........(77).....16%...310%
Westco Aircraft..........Sep.....128......118..........96........8%....33%
Cubic Corp.................Sep.....118......106..........85.......11%....39%
Aramark.....................Sep......122.......33.........(24)...270%...608%
Brocade Comm(C)......Oct.......92......107.........27....-14%...241%
Heico..........................Oct.....138......109.........88.....27%.....57%
Synnex.......................Nov....230......184........135.....25%....70%
Lennar.......................Nov......98........95.......(760).....3%...113%
HB Fuller....................Nov....124........96........120......29%.....3%
Clarcor.......................Nov....181.......143........106.....27%....71%
McCormick................Nov.....491......463........417.......6%....18%
Intl Speedway............Nov.....114........75..........48.....52%...138%
Levi Strauss...............Nov.....203......236.........190....-14%.....7%
IHS............................Nov.....162.......173.........159.....-6%......2%
(A) Corinthian Colleges 2011 PTI excludes goodwill impairment charge.
(B) Brooks Automation 2009 PTI excludes asset impairment charges.
(C) Brocade Communication Systems 2011 PTI excludes loss on sale of subsidiary. Its 2009 PTI excludes special litigation charge, in process research & development charge, and intangible asset impairment charge.
Monday, December 19, 2011
2 Month Payroll Tax Holiday Extension Favors the 1%
I have to give it to the Senate Republicans. As a whole, they are clearly much smarter and much more savvy than the Democrats when it comes to quickly assessing the economic impact on US citizens of their legislation.
The way the massive amount of executive compensation bonuses work is that the overwhelming majority of them are paid in the first two months of the year. Thus the overwhelming portion of the US Big Corp bonuses will get the 2% payroll tax holiday.
And thus many Wall Steet employees and also many Big Corp executives in all industries will get the entire annual 2% payroll tax holiday on the more than $100,000 of their compensation which is paid in the first 2 months of the year. Yeah, that's more than $2,000 of payroll tax relief in only the first two months of the year.
Not so for the 99%, who are fortunate to even be working, and whose compensation is earned equally over the year.
Thus, someone making $60,000 per year makes $10,000 in the first two months of the year, and thus gets only $200 of payroll tax relief in the first two months of the year, less than 10% of the payroll tax benefit of many Wall Street employees and most Big Corp executives.
And someone clearly underemployed, working several part-time jobs, and making $18,000 per year gets a meager $60 of payroll tax relief in the first two months of 2012, which is less than 3% of the more than $2,000 of payroll tax relief that many Wall Street employees and nearly all Big Corp executives will receive.
That's clearly not fair. This US Senate legislated Temporary 2 Month 2% Payroll Tax Holiday is not as it is widely touted by the US Congress as a Middle-Class Tax Break, but instead another tax break that clearly favors the 1%.
And even ignoring the bonuses paid in the first 2 months of the year, someone making a very high annual compensation will get an outsized benefit from the 2% First 2 Month payroll tax holiday as compared with modestly paid employees.
And Docs, the majority of whom are 1%ers, get a double benefit with this Senate legislation. Not only do they get the Doc Fix on Medicare fees, but also most of them receive outsized benefits in the first two months of the year from the 2% Payroll Tax Holiday on their very lucrative pay earned in the first two months of 2012.
No wonder Republican Senators McConnell from Kentucky and Physician Barrasso from Wyoming were so brazenly and arrogantly high five-ing each other after the 2 Month Payroll Tax Holiday passed the US Senate. These two US Senate Republican Leaders were openly displaying their elation from orchestrating another outcome where the 1% trounce on the 99%. There is a reason that the US Congress has by far the lowest approval rating since these ratings have started.
And the Democrats in the US Congress wonder why the Occupy Movement is focusing on all of the US Congress, not just on the Republicans?
The legislation in the US Congress consistently favors the awesomely powerful, smart, and clearly deceptive 1% over the 99%.
The way the massive amount of executive compensation bonuses work is that the overwhelming majority of them are paid in the first two months of the year. Thus the overwhelming portion of the US Big Corp bonuses will get the 2% payroll tax holiday.
And thus many Wall Steet employees and also many Big Corp executives in all industries will get the entire annual 2% payroll tax holiday on the more than $100,000 of their compensation which is paid in the first 2 months of the year. Yeah, that's more than $2,000 of payroll tax relief in only the first two months of the year.
Not so for the 99%, who are fortunate to even be working, and whose compensation is earned equally over the year.
Thus, someone making $60,000 per year makes $10,000 in the first two months of the year, and thus gets only $200 of payroll tax relief in the first two months of the year, less than 10% of the payroll tax benefit of many Wall Street employees and most Big Corp executives.
And someone clearly underemployed, working several part-time jobs, and making $18,000 per year gets a meager $60 of payroll tax relief in the first two months of 2012, which is less than 3% of the more than $2,000 of payroll tax relief that many Wall Street employees and nearly all Big Corp executives will receive.
That's clearly not fair. This US Senate legislated Temporary 2 Month 2% Payroll Tax Holiday is not as it is widely touted by the US Congress as a Middle-Class Tax Break, but instead another tax break that clearly favors the 1%.
And even ignoring the bonuses paid in the first 2 months of the year, someone making a very high annual compensation will get an outsized benefit from the 2% First 2 Month payroll tax holiday as compared with modestly paid employees.
And Docs, the majority of whom are 1%ers, get a double benefit with this Senate legislation. Not only do they get the Doc Fix on Medicare fees, but also most of them receive outsized benefits in the first two months of the year from the 2% Payroll Tax Holiday on their very lucrative pay earned in the first two months of 2012.
No wonder Republican Senators McConnell from Kentucky and Physician Barrasso from Wyoming were so brazenly and arrogantly high five-ing each other after the 2 Month Payroll Tax Holiday passed the US Senate. These two US Senate Republican Leaders were openly displaying their elation from orchestrating another outcome where the 1% trounce on the 99%. There is a reason that the US Congress has by far the lowest approval rating since these ratings have started.
And the Democrats in the US Congress wonder why the Occupy Movement is focusing on all of the US Congress, not just on the Republicans?
The legislation in the US Congress consistently favors the awesomely powerful, smart, and clearly deceptive 1% over the 99%.
Sunday, December 11, 2011
US Big Corp Stock Buybacks Propel the 1% But Pummel the 99%
US Big Corp Pretax Income increases went through the roof in 2010, and are doing just fine in 2011.
But the driver of this incredible US Big Corp Pretax Income growth in both 2010 and 2011 is mainly the Pretax profits generated overseas. This overseas income shift, along with the shipping overseas of the related US jobs, accelerated dramatically at the start of the 2000 Decade, and continues unabated, due both to lower overseas labor costs and to lower income tax rates in foreign tax havens.
And the much more modest US Pretax Profit increases in the most recent two years is driven more by US cost reductions, mostly much lower labor and related employee costs, rather than by highly desirable true increased economic profits from improved US demand.
Thus these massive increases in Pretax Income of US Big Corps haven't translated into highly-charged real US GDP growth.
This real US GDP growth has also been hampered by the severe US housing crisis, and the linked widespread underwater mortgage situation, which continue unabated.
In addition, this real US GDP growth has been negatively impacted by the very high energy cost environment.
Given this troubled US economic environment, despite the sky high Pretax Profits of the Big US Corps, it is only logical that US unemployment and US underemployment continue to be at a very high level. And it is also only logical that the US median income of those employed full time is unacceptably too low.
This horrible US job situation is a perfect storm for Big US Corps, the key members of the 1%. They get the benefit of having extremely hard-working, very loyal employees, who are afraid of losing their jobs. Thus the annual pay raises are modest. And these Big US Corps can freely replace workers by trading down for lower pay and related employee benefit costs of new workers. Further, many of these Big US Corps have taken full advantage of the much cheaper temporary work market.
Suffice it to say that the deck has been stacked against the US worker. And the Republicans in the US Congress, and sadly even a handful of the Democrats, continue to protect this very unfavorable environment for workers, which clearly benefits the US Big Corps, the 1%.
But to pile on, by using widespread financial engineering, the increases in the after-tax Net Income of the US Big Corps is even much more pronounced than the increases in the Pretax Income of these US Big Corps.
Let me focus on the 30 Dow Industrial Companies to show how substantial the spread is between the increased Pretax Profits and the increased after-tax Profits of these huge Dow companies.
Of the 30 Dow companies, 21 of them have had Net Income From Continuing Operations percentage increases that have exceeded their related Pretax Income From Continuing Operations percentage increases in the 8 years from 2002 to 2010. And 17 of them had this spread to be above 8%. Below here are these 17 Dow companies.
Pretax Income (PTI) vs Net Income (NI) % Growth (2002 to 2010)
...................................................................NI % Growth
........................% Change......% Change........Higher Than
..........................in PTI............in NI............PTI % Growth
ATT.....................78%.............164%..................86%
MCD...................321%.............399%..................77%
JPM...................887%.............944%..................58%
MSFT.................154%.............207%..................53%
HD.....................(10)%...............31%..................41%
KO......................159%.............198%..................39%
PG......................102%.............127%..................26%
CSCO....................56%...............81%..................25%
BAC(1)...............(15)%...............10%..................25%
JNJ......................82%.............102%..................20%
IBM....................162%.............178%..................16%
3M.......................92%.............104%..................13%
GE.....................(25)%.............(13)%..................12%
PFE...................(20)%...............(9)%..................10%
CAT...................237%.............247%..................10%
CVX(2)................27%...............36%....................9%
WMT...................90%...............99%....................9%
(1) Bank of America (BAC) 2010 PTI excludes huge Goodwill Impairment Charge.
(2) Chevron (CVX) earlier year is 2005, rather than 2002.
This substantially more robust Net Income growth over Pretax Income growth is mainly due to the shifting of US income overseas to foreign tax havens.
And the increased number and amounts of tax subsidies granted to US Big Corps, such as those favoring Big Oil and Big Financial Corps, have also helped this very favorable income increase spread.
In addition, these US Big Corps have benefited immensely from taking widespread advantage of very favorable tax settlements with the IRS in their Tax Audits. You can see this from the massive amounts of tax benefits booked by many of these large US Corps, as is shown in their income tax footnotes in their annual and quarterly reports filed with the SEC.
While the IRS has consistently caved in to the 1% US Big Corps in their tax audits, it doesn't take similar actions in its tax audits of small businesses. So it's not just many in the US Congress, but also many suits working for the dysfunctional IRS, who take actions that clearly and consistently favor the 1% over the 99%. Frankly, I think the Occupy Movement should add the IRS to its protest targets against the 1%.
With the bottom line after-tax Net Income percentage increases of these huge US corporations being substantially higher than their Pretax Income percentage increases, the stock prices of these Big Corps are substantially advanced, since bottom line after-tax Net Income is much more relevant to the stock market than is Pretax Income.
But you know what? US citizens, the 99%, get absolutely no economic benefit from this creative financial engineering causing this very favorable income spread accruing to the benefit of US Big Corps.
In fact, the 99% suffer from this financial engineering.
Why? Because the main cause of this income spread is the shifting of income from the US to lower foreign income tax havens, with the resultant substantial US job loss.
But now let me turn my attention to the main topic of this post, the massive stock buyback programs of US Big Corps.
While nearly all of them spend heavily on Common Stock Buybacks, there are 10 of these 30 Dow Industrial companies, as you can see below, which had their Total Amount Spent on Common Stock Buybacks exceed 50% of their Total Cash Flow Generated From Operations in the most recent 6 years (from 2005 to 2010).
.......................Six Years 2005 to 2010
..................Common Stock........Cash Flow
.....................Buybacks.......From Operations.....%
...........................( millions of dollars)
CSCO..............44,790..................60,241..........74%
MSFT..............91,492................123,916..........74%
DIS................26,074..................35,695..........73%
HPQ...............52,863..................73,499..........72%
HD.................23,430..................35,246..........66%
IBM...............68,033.................105,161..........65%
PG.................51,868...................84,846..........61%
TRV...............14,447..................24,072..........60%
MCD..............17,519...................31,565..........56%
XOM............148,131.................286,002..........52%
So how is the 99% impacted by these massive stock buybacks of US Big Corps, the 1%?
Well, they are crushed.
Why? Because these greedy US Big Corps are spending a very significant portion of their Cash Flow Generated From Operations on these Common Stock Buybacks. This doesn't help the 99% at all. In fact, it hurts them.
How? Well, the Big Corps elect to greedily spend on buying back their own common stock, which does absolutely nothing for US job creation, rather than electing to make wise, patriotic investment spending on hiring workers, on training workers, on capital expenditures, and on research and development, all of which increase real US GDP growth and US job creation.
So, what's with all of these massive common stock buybacks, which were approved by the Board of Directors, mostly 1%ers, of these US Big Corps?
It's all about the substantially favorable impact of stock buyback programs on Earnings Per Share (EPS), which is the true driver of the market prices of common stocks. And much of the compensation of top executives of US Big Corps, who are mostly 1%, is driven by the market prices of the US Big Corps that they work for.
When a company buys back its own stock, the number of common shares outstanding, the denominator in the EPS computation, is reduced. Thus, this bumps up EPS.
To quantify the extent on the EPS denominator, there were 21 of the 30 Dow Industrial Corps which had their Diluted Weighted Average Number of Common Shares Outstanding decrease by more than 5% in the past 8 years, from 2002 to 2010, as you can see below.
........Weighted Average Number of Common Shares Outstanding
.....................2010...............2002........% Decrease
..................(millions of shares)
TRV...............483.................713(1)..........-32%
HPQ............2,128...............3,063.............-31%
HD..............1,658...............2,344.............-29%
XOM...........4,897...............6,803.............-28%
IBM............1,287...............1,731.............-26%
CSCO..........5,563...............7,223.............-23%
MSFT.........8,593..............10,882.............-21%
WMT..........3,670...............4,446.............-17%
MCD...........1,080...............1,282.............-16%
INTC..........5,696...............6,759.............-16%
AXP...........1,195................1,330.............-10%
UTX.............923................1,011...............-9%
JNJ...........2,789...............3,054...............-9%
PG............3,002...............3,286...............-9%
3M...............726..................791...............-8%
BA...............744..................808...............-8%
DD...............922..................999...............-8%
DIS...........1,909...............2,067...............-8%
CAT.............650..................694...............-6%
KO............2,333...............2,483...............-6%
CVX.........2,007...............2,126...............-6%
(1) Travelers (TRV) earlier year is 2005, rather than 2002.
Granted, when a company buys back its own stock, the Net Income of the Controlling Interest of the Corporation, which is predominantly the entire numerator in this EPS computation, is also reduced. This reduces EPS.
But with the financial meltdown, the US Government created an economic environment where interest rates are so incredibly low. In addition, the larger US Corps benefit from having lower interest rates on their debt due to their financial strength. Thus the negative impact on the EPS numerator of US Big Corp from common stock buybacks is minor as compared with the substantially positive impact on the EPS denominator.
But the 99%, including small businesses, don't benefit from these common stock buybacks of US Big Corps. Only the 1% do. Again the deck is stacked against the 99%.
Just how much impact is there on EPS from all of these common stock buybacks of US Big Corps? Well, it's just massive.
There were 21 of the 30 Dow companies which had their EPS From Continuing Operations percentage increase exceed by at least 12% their percentage increase of Net Income From Continuing Operations of the Controlling Interest(NI of CI), of the Big Corp, for the past 8 years, from 2002 to 2010, as you can see below.
........EPS % Change vs NI of CI % Change (2002 to 2010)
..........................................................EPS % Change
...........................................................Higher Than
......................NI of CI.............EPS..........NI of CI
.....................% Change.......% Change....% Change
HPQ.................179%.............300%...........121%
XOM................177%.............286%...........110%
IBM.................178%.............275%............97%
CVX................1626%...........1723%............97%
MCD.................399%.............495%............96%
MSFT...............207%.............290%............82%
INTC................268%.............337%............69%
TRV(1)..............56%..............124%............68%
CSCO.................81%..............134%............53%
DIS.................259%..............306%............47%
WMT.................96%..............138%............41%
HD.....................-9%...............29%............38%
CAT.................238%.............261%............23%
KO..................197%..............216%............19%
JNJ.................102%..............121%............19%
UTX..................96%..............114%............19%
3M..................107%.............125%............18%
AXP..................52%...............67%............15%
DD....................65%...............78%............14%
PG(1)................36%...............49%............13%
BA....................44%...............57%............12%
(1) Both Travelers (TRV) and Procter & Gamble (PG) have 2005 as their earlier year above, rather than 2002.
Given the devastatingly negative effect of these massive US Big Corp Common Stock Buybacks on the 99%, including small businesses, and the incredibly outsized positive effect on the 1% US Big Corps, I think it would be wise for the US Government to provide a measured disincentive for US Big Corps that overdose on common stock buybacks.
Perhaps, something like the following would make sense. For any US Corporation whose dollar amounts of its Common Stock Buybacks in any year exceed perhaps 40% of its Cash Flow Generated From Operations, a financial fee would be paid to the US Government for a certain percentage of these excess Common Stock Buybacks which exceed this 40%.
When I get some time, I'll expand this research to include some non-Dow US Big Corps. I expect that the results for these non-Dow US Big Corps will be very similar to what was found here for the above Dow Industrial companies.
Here is my subsequent research related to the extent of Common Stock Buybacks by the Big 4 Health Insurance Corps for just the most recent 6 years from 2005 to 2010:
.............................Six Years 2005 to 2010
........................Common Stock........Cash Flow
...........................Buybacks.......From Operations.....%
.................................(millions of dollars)
WellPoint.............21,308..................18,516.........115%
Cigna......................6,147...................6,846..........90%
Aetna.....................9,836..................11,464..........86%
United Health.......18,503.................32,622..........57%
.......Weighted Average Number of Common Shares Outstanding
..............................2010...............2005........% Decrease
...........................(millions of shares)
WellPoint................416..................626..............-34%
Aetna.....................423..................606..............-30%
Cigna......................275..................389..............-29%
United Health.......1,131...............1,333...............-15%
...........EPS % Change vs NI of CI % Change (2005 to 2010)
...............................................................EPS % Change
................................................................Higher Than
.........................NI of CI*..............EPS..........NI of CI
........................% Change.........% Change....% Change
WellPoint.............17%.................76%..............59%
Aetna...................12%.................61%..............49%
Cigna.....................5%.................49%..............44%
United Health......50%................77%...............27%
* Net Income of Controlled Interest, or of the Corp
And here is my subsequent research related to the extent of Common Stock Buybacks by the Big 4 US Defense Contractor Corps for just the most recent 6 years from 2005 to 2010:
...................................Six Years 2005 to 2010
..............................Common Stock........Cash Flow
.................................Buybacks.......From Operations.....%
....................................(millions of dollars)
Raytheon....................6,780..................11,596..........58%
Lockheed Martin.......12,754..................22,359..........57%
Northrop Grumman....7,042..................14,851..........47%
General Dynamics.......3,854..................16,106..........24%
.......Weighted Average Number of Common Shares Outstanding
.................................2010...............2005........% Decrease
..............................(millions of shares)
Lockheed Martin........368.................446...............-17%
Northrop Grumman...301.................363...............-17%
Raytheon...................377.................453...............-17%
General Dynamics......385.................405.................-5%
................EPS % Change vs NI of CI % Change (2005 to 2010)
....................................................................EPS % Change
.....................................................................Higher Than
..............................NI of CI*..............EPS..........NI of CI
.............................% Change.........% Change....% Change
Raytheon.................101%................142%............41%
Northrop Grumman...46%.................76%............30%
Lockheed Martin.......45%..................75%............30%
General Dynamics......81%..................91%............10%
* Net Income of Controlled Interest, or of the Corp
And here is my subsequent research related to the extent that non-Dow, non-Health Insurance Big US Health Care Corps have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
.......................................Six Years 2005 to 2010
..................................Common Stock........Cash Flow
.....................................Buybacks.......From Operations.....%
...........................................(millions of dollars)
Biogen IDEC.....................7,202..................7,014.........103%
Medco Health Solutions..11,067.................11,130..........99%
Cardinal Health................6,844...................8,745..........78%
Gilead Sciences................8,024..................11,746..........68%
Amgen..........................20,792..................33,812..........61%
McKesson........................6,534...................11,151..........59%
Forest Labs......................2,955...................5,878..........50%
Baxter.............................7,247..................14,465..........50%
Becton Dickinson.............4,149...................9,058..........46%
Medtronic.......................9,101..................20,438..........45%
Walgreens.......................6,090..................19,334..........31%
.......Weighted Average Number of Common Shares Outstanding
.....................................2010...............2005........% Decrease
..................................(millions of shares)
Biogen IDEC...................255..................346...............-26%
Amgen...........................965...............1,258...............-23%
Medco Health Solutions.452..................587...............-23%
Cardinal Health..............353..................429...............-18%
McKesson......................263..................316...............-17%
Forest Labs....................291..................340...............-14%
Becton Dickinson...........226..................257...............-12%
Medtronic...................1,082...............1,217...............-11%
Walgreens......................925...............1,019.................-9%
Gilead Sciences..............873..................949.................-8%
Baxter...........................594..................629.................-6%
Stryker..........................400.................411..................-3%
................EPS % Change vs NI of CI % Change (2005 to 2010)
...........................................................................EPS % Change
............................................................................Higher Than
.....................................NI of CI*..............EPS..........NI of CI
....................................% Change.........% Change....% Change
Biogen IDEC.....................524%...............738%...........214%
Medco Health Solutions..137%................207%............70%
Amgen..............................26%..................63%............37%
McKesson.........................52%..................82%............30%
Gilead Sciences...............256%................286%............30%
Forest Labs......................48%..................73%............25%
Becton Dickinson.............55%..................76%............21%
Cardinal Health...............-17%....................1%............18%
Walgreens........................55%..................71%............16%
Medtronic........................22%..................37%............15%
Baxter.............................48%..................57%..............9%
Stryker..........................101%................107%..............6%
The Health Care Industry is rampant with large Corps that are able to continually reduce their effective income tax rates. Below here are the non-Dow, non-Health Insurance Big US Health Care Corps that had their Net Income From Continuing Operations percentage increases that have exceeded their related Pretax Income From Continuing Operations percentage increases in the 5 years from 2005 to 2010.
Pretax Income (PTI) vs Net Income (NI) % Growth (2005 to 2010)
........................................................................NI % Growth
.............................% Change......% Change........Higher Than
...............................in PTI............in NI............PTI % Growth
Biogen IDEC..............380%............458%.................78%
Gilead Sciences.........237%.............255%.................18%
Baxter........................31%...............49%..................18%
Stryker.......................85%.............101%..................17%
Amgen..........................9%..............26%..................17%
Covidien.....................17%..............32%..................15%
Abbott Labs................24%..............37%..................13%
Eli Lilly.....................140%.............153%..................13%
McKesson...................40%..............52%..................12%
Medtronic...................18%..............22%....................4%
Becton Dickinson........52%..............55%....................3%
HCA............................-4%...............-2%....................2%
And here is my subsequent research related to the extent that non-Dow Big US Financial Corps have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
.......................................Six Years 2005 to 2010
..................................Common Stock........Cash Flow
.....................................Buybacks.......From Operations.....%
...........................................(millions of dollars)
Charles Schwab.................4,657..................5,713..........82%
Aon..................................4,278..................5,305..........81%
Franklin Resources...........5,825..................8,275..........70%
Western Union..................3,043..................6,682..........46%
Chubb..............................7,947.................17,620.........45%
Visa*................................3,024..................7,675..........39%
T Rowe Price.....................1,484..................3,902..........38%
Progressive......................3,865.................10,525..........37%
Allstate............................9,337.................27,993..........33%
.......Weighted Average Number of Common Shares Outstanding
....................................2010...............2005........% Decrease
.....................................(millions of shares)
Chubb...........................322.................408...............-21%
Allstate.........................543.................667...............-19%
Progressive..................663..................799...............-17%
Franklin Resources.......222.................262...............-15%
Aon..............................298..................342...............-13%
Western Union.............669..................764...............-12%
Charles Schwab..........1,194..............1,308.................-9%
Visa*...........................707.................769.................-8%
Aflac...........................473..................508.................-7%
MasterCard..................131..................135.................-3%
T Rowe Price...............265..................273.................-3%
................EPS % Change vs NI of CI % Change (2005 to 2010)
...........................................................................EPS % Change
............................................................................Higher Than
.....................................NI of CI*..............EPS..........NI of CI
....................................% Change.........% Change....% Change
Visa*..............................392%................438%............46%
Chubb...............................19%..................51%............32%
Franklin Resources...........52%..................77%............25%
Aon..................................76%..................98%............22%
MasterCard......................591%................610%...........19%
Progressive......................-23%..................-7%............16%
Western Union...................-2%..................12%............14%
Allstate............................-47%.................-35%............12%
Aflac.................................58%..................70%............12%
Charles Schwab................-28%.................-21%..............7%
T Rowe Price.....................56%..................60%..............4%
* Visa's above earlier year is 2007, rather than 2005.
And here is my subsequent research related to the extent that extremely profitable Non-Dow US Big Corps, with Annual Pretax Income just short of $2 bil and above, and which are in Other Sectors which were not already covered above in this post, have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
...................................Six Years 2005 to 2010
..............................Common Stock.......Cash Flow
.................................Buybacks.......From Operations.....%
....................................(millions of dollars)
Texas Instruments......19,869................20,261............98%
Dell.............................17,946................22,438............80%
Gap...............................7,961..................9,966............80%
Time Warner...............25,538................32,942............78%
Applied Materials.........7,831................10,378............75%
Viacom........................8,176................11,024.............74%
Accenture..................12,754................17,796............72%
DirecTV......................14,983................21,526............70%
ADP.............................6,784..................9,834............69%
Phillip Morris*............15,911................25,256............63%
General Mills................6,790................10,861............63%
Best Buy.......................6,025................10,800............56%
TJX..............................4,990..................9,117.............55%
Deere...........................5,776................11,165..............52%
Nike..............................6,243................12,195.............51%
Colgate Palmolive.........7,106................14,600............49%
PepsiCo......................20,010................41,113.............49%
CSX...............................5,661................13,531.............42%
UPS.............................12,526................30,051............42%
Kimberly Clark..............6,558................16,062............41%
Illinois Tool Works........4,988................12,332............40%
Honeywell.....................8,474................21,504............39%
Costco...........................5,560................14,153............39%
Ebay..............................6,041................15,435............39%
Target..........................10,265................29,020...........35%
Praxair..........................3,742................11,296............33%
EMC...............................6,112................18,931............32%
Lowe's...........................7,916................24,719............32%
Oracle..........................14,151................45,613............31%
Qualcomm....................8,095................26,770...........30%
Norfolk Southern...........4,151................13,933............30%
* Phillip Morris above numbers are for the 3 years from 2008 to 2010.
.......Weighted Average Number of Common Shares Outstanding
....................................2010..........2005.....% Decrease
.....................................(millions of shares)
DirecTV.........................886..........1,395..........-36%
GPS................................641............902..........-29%
Texas Instruments......1,213..........1,671..........-27%
Time Warner...............1,145..........1,570..........-27%
Loews............................420............558..........-25%
Dell.............................1,955..........2,449..........-20%
Newscorp...................2,633..........3,228..........-18%
Target...........................729.............889..........-18%
TJX...............................406.............492..........-17%
Best Buy........................417.............505..........-17%
Accenture.....................742.............895..........-17%
Viacom.........................594.............716..........-17%
CSX...............................385.............456..........-16%
Applied Materials.......1,330..........1,565..........-15%
Comcast.....................2,820..........3,312..........-15%
ADP..............................498.............580..........-14%
Kimberly Clark..............414............477..........-13%
Deere............................429............493..........-13%
Lowes........................1,403..........1,607..........-13%
Phillip Morris*...........1,842..........2,109..........-13%
Illinois Tool Works.......503.............575..........-13%
General Mills................665.............758..........-12%
Halliburton...................911..........1,038..........-12%
EMC...........................2,148..........2,433..........-12%
Kroger..........................638.............731..........-13%
UPS...........................1,003...........1,116..........-10%
Norfolk Southern..........372.............412..........-10%
Emerson Electric..........754.............825............-9%
Honeywell....................781.............852............-8%
Colgate Palmolive.........511.............557............-8%
Nike.............................486.............528............-8%
Costco..........................443.............480............-8%
Devon Energy..............436.............470............-7%
Praxair.........................311.............330............-6%
Union Pacific................503............533............-6%
Carnival.......................805.............853............-6%
PepsiCo......................1,614..........1,706............-5%
Ebay..........................1,327..........1,394............-5%
Southern Copper..........850.............883............-4%
Oracle........................5,128..........5,287............-3%
Monsanto.....................542.............552............-2%
Altria Group*............2,079..........2,113............-2%
* Phillip Morris and Altria Group both have an earlier year above of 2007, rather than 2005.
................EPS % Change vs NI of CI % Change (2005 to 2010)
........................................................................EPS % Change
.........................................................................Higher Than
..................................NI of CI*..............EPS..........NI of CI
.................................% Change.........% Change....% Change
DirecTV........................621%...............945%..........325%
Comcast........................339%...............416%...........77%
Texas Instruments..........49%...............102%...........53%
Loews.............................36%.................86%...........50%
Gap..................................6%.................49%...........43%
TJX................................94%...............134%...........40%
Time Warner....................3%.................42%...........39%
CSX..............................117%...............150%...........38%
Accenture.....................77%...............114%............36%
Viacom..........................37%.................65%...........28%
Target............................21%.................48%...........26%
ADP...............................49%.................74%...........25%
Best Buy.........................12%.................36%...........24%
Applied Materials..........27%.................49%...........23%
General Mills.................65%.................86%...........21%
Deere............................32%.................52%...........20%
EMC..............................68%.................87%...........20%
Dell..............................-27%.................-8%............19%
Kimberly Clark..............17%.................34%...........18%
Newscorp........................6%.................24%...........17%
Union Pacific...............171%...............188%...........17%
Phillip Morris*..............20%.................37%...........17%
Kroger...........................16%.................33%...........16%
Illinois Tool Works..........3%.................18%...........15%
Colgate Palmolive..........63%................77%...........14%
Nike...............................53%................66%...........13%
Halliburton...................-15%.................-3%...........12%
Emerson Electric...........33%.................45%...........12%
Norfolk Southern...........17%.................29%...........12%
Honeywell.....................29%.................41%...........11%
Costco...........................33%.................43%...........11%
UPS..............................-10%...................0%...........10%
Praxair..........................63%.................73%...........10%
Lowe's..........................-27%................-18%.............9%
PepsiCo.........................55%.................64%.............9%
Oracle..........................153%...............161%.............8%
Ebay.............................66%.................74%.............8%
Devon Energy..............-20%...............-15%.............6%
Southern Copper...........11%.................15%.............4%
Carnival.......................-12%.................-9%.............4%
Monsanto....................139%..............143%.............3%
Qualcomm.....................85%...............88%.............2%
Altria Group*................25%...............26%.............2%
* Phillip Morris and Altria Group both have an earlier year above of 2007, rather than 2005.
When I review all of the above numbers, it is pretty clear to me that the Occupying Protesters are spot on.....the deck is clearly stacked in favor of the US Big Corps and their beneficiaries, nearly all 1%ers, who are amassing this incredibly lucrative wealth from the very simple financial engineering strategy of overdosing on Common Stock Buybacks.
The 99%, including all small US businesses and the overwhelming majority of all US businesses, either can't do this or fair-mindedly elect to not do this. And even worse, this US Big Corp Common Stock Buyback Overdosing negatively impacts the economic situation of all of the 99%, thereby markedly expanding the Wealth GAP between the 1% and the 99%.
It's not right.....not even close to being right. And the US Congress has consistently allowed, and even fostered, this devastatingly detrimental, greedy overdosing by US Big Corps on Common Stock Buybacks to happen.
The country's 99% is shouting out for the US Congress to completely reverse course and to start serving the entire country, instead of just the 1%. Many in the US Congress publicly claim that they are serving the entire country, but by their actions, they are consistently and clearly legislating for just the 1%. The only part of the US Government that is consistently attempting to serve the entire country is the Obama Administration, although even they do go off target on the US economy at times.
==================
Dow Industrials
3M 3M
AA Alcoa
ATT ATT
AXP American Express
BA Boeing
BAC Bank of America
CAT Caterpillar
CSCO Cisco
CVX Chevron
DD Dupont
DIS Walt Disney
GE GE
HD Home Depot
HPQ Hewlett Packard
IBM IBM
INTC Intel
JNJ JNJ
JPM JPMorgan Chase
KFT Kraft Foods
KO Coca Cola
MCD McDonalds
MRK Merck
MSFT Microsoft
PFE Pfizer
PG Procter & Gamble
TRV Travelers
UTX United Technologies
VZ Verizon
WMT Walmart
XOM Exxon Mobil
But the driver of this incredible US Big Corp Pretax Income growth in both 2010 and 2011 is mainly the Pretax profits generated overseas. This overseas income shift, along with the shipping overseas of the related US jobs, accelerated dramatically at the start of the 2000 Decade, and continues unabated, due both to lower overseas labor costs and to lower income tax rates in foreign tax havens.
And the much more modest US Pretax Profit increases in the most recent two years is driven more by US cost reductions, mostly much lower labor and related employee costs, rather than by highly desirable true increased economic profits from improved US demand.
Thus these massive increases in Pretax Income of US Big Corps haven't translated into highly-charged real US GDP growth.
This real US GDP growth has also been hampered by the severe US housing crisis, and the linked widespread underwater mortgage situation, which continue unabated.
In addition, this real US GDP growth has been negatively impacted by the very high energy cost environment.
Given this troubled US economic environment, despite the sky high Pretax Profits of the Big US Corps, it is only logical that US unemployment and US underemployment continue to be at a very high level. And it is also only logical that the US median income of those employed full time is unacceptably too low.
This horrible US job situation is a perfect storm for Big US Corps, the key members of the 1%. They get the benefit of having extremely hard-working, very loyal employees, who are afraid of losing their jobs. Thus the annual pay raises are modest. And these Big US Corps can freely replace workers by trading down for lower pay and related employee benefit costs of new workers. Further, many of these Big US Corps have taken full advantage of the much cheaper temporary work market.
Suffice it to say that the deck has been stacked against the US worker. And the Republicans in the US Congress, and sadly even a handful of the Democrats, continue to protect this very unfavorable environment for workers, which clearly benefits the US Big Corps, the 1%.
But to pile on, by using widespread financial engineering, the increases in the after-tax Net Income of the US Big Corps is even much more pronounced than the increases in the Pretax Income of these US Big Corps.
Let me focus on the 30 Dow Industrial Companies to show how substantial the spread is between the increased Pretax Profits and the increased after-tax Profits of these huge Dow companies.
Of the 30 Dow companies, 21 of them have had Net Income From Continuing Operations percentage increases that have exceeded their related Pretax Income From Continuing Operations percentage increases in the 8 years from 2002 to 2010. And 17 of them had this spread to be above 8%. Below here are these 17 Dow companies.
Pretax Income (PTI) vs Net Income (NI) % Growth (2002 to 2010)
...................................................................NI % Growth
........................% Change......% Change........Higher Than
..........................in PTI............in NI............PTI % Growth
ATT.....................78%.............164%..................86%
MCD...................321%.............399%..................77%
JPM...................887%.............944%..................58%
MSFT.................154%.............207%..................53%
HD.....................(10)%...............31%..................41%
KO......................159%.............198%..................39%
PG......................102%.............127%..................26%
CSCO....................56%...............81%..................25%
BAC(1)...............(15)%...............10%..................25%
JNJ......................82%.............102%..................20%
IBM....................162%.............178%..................16%
3M.......................92%.............104%..................13%
GE.....................(25)%.............(13)%..................12%
PFE...................(20)%...............(9)%..................10%
CAT...................237%.............247%..................10%
CVX(2)................27%...............36%....................9%
WMT...................90%...............99%....................9%
(1) Bank of America (BAC) 2010 PTI excludes huge Goodwill Impairment Charge.
(2) Chevron (CVX) earlier year is 2005, rather than 2002.
This substantially more robust Net Income growth over Pretax Income growth is mainly due to the shifting of US income overseas to foreign tax havens.
And the increased number and amounts of tax subsidies granted to US Big Corps, such as those favoring Big Oil and Big Financial Corps, have also helped this very favorable income increase spread.
In addition, these US Big Corps have benefited immensely from taking widespread advantage of very favorable tax settlements with the IRS in their Tax Audits. You can see this from the massive amounts of tax benefits booked by many of these large US Corps, as is shown in their income tax footnotes in their annual and quarterly reports filed with the SEC.
While the IRS has consistently caved in to the 1% US Big Corps in their tax audits, it doesn't take similar actions in its tax audits of small businesses. So it's not just many in the US Congress, but also many suits working for the dysfunctional IRS, who take actions that clearly and consistently favor the 1% over the 99%. Frankly, I think the Occupy Movement should add the IRS to its protest targets against the 1%.
With the bottom line after-tax Net Income percentage increases of these huge US corporations being substantially higher than their Pretax Income percentage increases, the stock prices of these Big Corps are substantially advanced, since bottom line after-tax Net Income is much more relevant to the stock market than is Pretax Income.
But you know what? US citizens, the 99%, get absolutely no economic benefit from this creative financial engineering causing this very favorable income spread accruing to the benefit of US Big Corps.
In fact, the 99% suffer from this financial engineering.
Why? Because the main cause of this income spread is the shifting of income from the US to lower foreign income tax havens, with the resultant substantial US job loss.
But now let me turn my attention to the main topic of this post, the massive stock buyback programs of US Big Corps.
While nearly all of them spend heavily on Common Stock Buybacks, there are 10 of these 30 Dow Industrial companies, as you can see below, which had their Total Amount Spent on Common Stock Buybacks exceed 50% of their Total Cash Flow Generated From Operations in the most recent 6 years (from 2005 to 2010).
.......................Six Years 2005 to 2010
..................Common Stock........Cash Flow
.....................Buybacks.......From Operations.....%
...........................( millions of dollars)
CSCO..............44,790..................60,241..........74%
MSFT..............91,492................123,916..........74%
DIS................26,074..................35,695..........73%
HPQ...............52,863..................73,499..........72%
HD.................23,430..................35,246..........66%
IBM...............68,033.................105,161..........65%
PG.................51,868...................84,846..........61%
TRV...............14,447..................24,072..........60%
MCD..............17,519...................31,565..........56%
XOM............148,131.................286,002..........52%
So how is the 99% impacted by these massive stock buybacks of US Big Corps, the 1%?
Well, they are crushed.
Why? Because these greedy US Big Corps are spending a very significant portion of their Cash Flow Generated From Operations on these Common Stock Buybacks. This doesn't help the 99% at all. In fact, it hurts them.
How? Well, the Big Corps elect to greedily spend on buying back their own common stock, which does absolutely nothing for US job creation, rather than electing to make wise, patriotic investment spending on hiring workers, on training workers, on capital expenditures, and on research and development, all of which increase real US GDP growth and US job creation.
So, what's with all of these massive common stock buybacks, which were approved by the Board of Directors, mostly 1%ers, of these US Big Corps?
It's all about the substantially favorable impact of stock buyback programs on Earnings Per Share (EPS), which is the true driver of the market prices of common stocks. And much of the compensation of top executives of US Big Corps, who are mostly 1%, is driven by the market prices of the US Big Corps that they work for.
When a company buys back its own stock, the number of common shares outstanding, the denominator in the EPS computation, is reduced. Thus, this bumps up EPS.
To quantify the extent on the EPS denominator, there were 21 of the 30 Dow Industrial Corps which had their Diluted Weighted Average Number of Common Shares Outstanding decrease by more than 5% in the past 8 years, from 2002 to 2010, as you can see below.
........Weighted Average Number of Common Shares Outstanding
.....................2010...............2002........% Decrease
..................(millions of shares)
TRV...............483.................713(1)..........-32%
HPQ............2,128...............3,063.............-31%
HD..............1,658...............2,344.............-29%
XOM...........4,897...............6,803.............-28%
IBM............1,287...............1,731.............-26%
CSCO..........5,563...............7,223.............-23%
MSFT.........8,593..............10,882.............-21%
WMT..........3,670...............4,446.............-17%
MCD...........1,080...............1,282.............-16%
INTC..........5,696...............6,759.............-16%
AXP...........1,195................1,330.............-10%
UTX.............923................1,011...............-9%
JNJ...........2,789...............3,054...............-9%
PG............3,002...............3,286...............-9%
3M...............726..................791...............-8%
BA...............744..................808...............-8%
DD...............922..................999...............-8%
DIS...........1,909...............2,067...............-8%
CAT.............650..................694...............-6%
KO............2,333...............2,483...............-6%
CVX.........2,007...............2,126...............-6%
(1) Travelers (TRV) earlier year is 2005, rather than 2002.
Granted, when a company buys back its own stock, the Net Income of the Controlling Interest of the Corporation, which is predominantly the entire numerator in this EPS computation, is also reduced. This reduces EPS.
But with the financial meltdown, the US Government created an economic environment where interest rates are so incredibly low. In addition, the larger US Corps benefit from having lower interest rates on their debt due to their financial strength. Thus the negative impact on the EPS numerator of US Big Corp from common stock buybacks is minor as compared with the substantially positive impact on the EPS denominator.
But the 99%, including small businesses, don't benefit from these common stock buybacks of US Big Corps. Only the 1% do. Again the deck is stacked against the 99%.
Just how much impact is there on EPS from all of these common stock buybacks of US Big Corps? Well, it's just massive.
There were 21 of the 30 Dow companies which had their EPS From Continuing Operations percentage increase exceed by at least 12% their percentage increase of Net Income From Continuing Operations of the Controlling Interest(NI of CI), of the Big Corp, for the past 8 years, from 2002 to 2010, as you can see below.
........EPS % Change vs NI of CI % Change (2002 to 2010)
..........................................................EPS % Change
...........................................................Higher Than
......................NI of CI.............EPS..........NI of CI
.....................% Change.......% Change....% Change
HPQ.................179%.............300%...........121%
XOM................177%.............286%...........110%
IBM.................178%.............275%............97%
CVX................1626%...........1723%............97%
MCD.................399%.............495%............96%
MSFT...............207%.............290%............82%
INTC................268%.............337%............69%
TRV(1)..............56%..............124%............68%
CSCO.................81%..............134%............53%
DIS.................259%..............306%............47%
WMT.................96%..............138%............41%
HD.....................-9%...............29%............38%
CAT.................238%.............261%............23%
KO..................197%..............216%............19%
JNJ.................102%..............121%............19%
UTX..................96%..............114%............19%
3M..................107%.............125%............18%
AXP..................52%...............67%............15%
DD....................65%...............78%............14%
PG(1)................36%...............49%............13%
BA....................44%...............57%............12%
(1) Both Travelers (TRV) and Procter & Gamble (PG) have 2005 as their earlier year above, rather than 2002.
Given the devastatingly negative effect of these massive US Big Corp Common Stock Buybacks on the 99%, including small businesses, and the incredibly outsized positive effect on the 1% US Big Corps, I think it would be wise for the US Government to provide a measured disincentive for US Big Corps that overdose on common stock buybacks.
Perhaps, something like the following would make sense. For any US Corporation whose dollar amounts of its Common Stock Buybacks in any year exceed perhaps 40% of its Cash Flow Generated From Operations, a financial fee would be paid to the US Government for a certain percentage of these excess Common Stock Buybacks which exceed this 40%.
When I get some time, I'll expand this research to include some non-Dow US Big Corps. I expect that the results for these non-Dow US Big Corps will be very similar to what was found here for the above Dow Industrial companies.
Here is my subsequent research related to the extent of Common Stock Buybacks by the Big 4 Health Insurance Corps for just the most recent 6 years from 2005 to 2010:
.............................Six Years 2005 to 2010
........................Common Stock........Cash Flow
...........................Buybacks.......From Operations.....%
.................................(millions of dollars)
WellPoint.............21,308..................18,516.........115%
Cigna......................6,147...................6,846..........90%
Aetna.....................9,836..................11,464..........86%
United Health.......18,503.................32,622..........57%
.......Weighted Average Number of Common Shares Outstanding
..............................2010...............2005........% Decrease
...........................(millions of shares)
WellPoint................416..................626..............-34%
Aetna.....................423..................606..............-30%
Cigna......................275..................389..............-29%
United Health.......1,131...............1,333...............-15%
...........EPS % Change vs NI of CI % Change (2005 to 2010)
...............................................................EPS % Change
................................................................Higher Than
.........................NI of CI*..............EPS..........NI of CI
........................% Change.........% Change....% Change
WellPoint.............17%.................76%..............59%
Aetna...................12%.................61%..............49%
Cigna.....................5%.................49%..............44%
United Health......50%................77%...............27%
* Net Income of Controlled Interest, or of the Corp
And here is my subsequent research related to the extent of Common Stock Buybacks by the Big 4 US Defense Contractor Corps for just the most recent 6 years from 2005 to 2010:
...................................Six Years 2005 to 2010
..............................Common Stock........Cash Flow
.................................Buybacks.......From Operations.....%
....................................(millions of dollars)
Raytheon....................6,780..................11,596..........58%
Lockheed Martin.......12,754..................22,359..........57%
Northrop Grumman....7,042..................14,851..........47%
General Dynamics.......3,854..................16,106..........24%
.......Weighted Average Number of Common Shares Outstanding
.................................2010...............2005........% Decrease
..............................(millions of shares)
Lockheed Martin........368.................446...............-17%
Northrop Grumman...301.................363...............-17%
Raytheon...................377.................453...............-17%
General Dynamics......385.................405.................-5%
................EPS % Change vs NI of CI % Change (2005 to 2010)
....................................................................EPS % Change
.....................................................................Higher Than
..............................NI of CI*..............EPS..........NI of CI
.............................% Change.........% Change....% Change
Raytheon.................101%................142%............41%
Northrop Grumman...46%.................76%............30%
Lockheed Martin.......45%..................75%............30%
General Dynamics......81%..................91%............10%
* Net Income of Controlled Interest, or of the Corp
And here is my subsequent research related to the extent that non-Dow, non-Health Insurance Big US Health Care Corps have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
.......................................Six Years 2005 to 2010
..................................Common Stock........Cash Flow
.....................................Buybacks.......From Operations.....%
...........................................(millions of dollars)
Biogen IDEC.....................7,202..................7,014.........103%
Medco Health Solutions..11,067.................11,130..........99%
Cardinal Health................6,844...................8,745..........78%
Gilead Sciences................8,024..................11,746..........68%
Amgen..........................20,792..................33,812..........61%
McKesson........................6,534...................11,151..........59%
Forest Labs......................2,955...................5,878..........50%
Baxter.............................7,247..................14,465..........50%
Becton Dickinson.............4,149...................9,058..........46%
Medtronic.......................9,101..................20,438..........45%
Walgreens.......................6,090..................19,334..........31%
.......Weighted Average Number of Common Shares Outstanding
.....................................2010...............2005........% Decrease
..................................(millions of shares)
Biogen IDEC...................255..................346...............-26%
Amgen...........................965...............1,258...............-23%
Medco Health Solutions.452..................587...............-23%
Cardinal Health..............353..................429...............-18%
McKesson......................263..................316...............-17%
Forest Labs....................291..................340...............-14%
Becton Dickinson...........226..................257...............-12%
Medtronic...................1,082...............1,217...............-11%
Walgreens......................925...............1,019.................-9%
Gilead Sciences..............873..................949.................-8%
Baxter...........................594..................629.................-6%
Stryker..........................400.................411..................-3%
................EPS % Change vs NI of CI % Change (2005 to 2010)
...........................................................................EPS % Change
............................................................................Higher Than
.....................................NI of CI*..............EPS..........NI of CI
....................................% Change.........% Change....% Change
Biogen IDEC.....................524%...............738%...........214%
Medco Health Solutions..137%................207%............70%
Amgen..............................26%..................63%............37%
McKesson.........................52%..................82%............30%
Gilead Sciences...............256%................286%............30%
Forest Labs......................48%..................73%............25%
Becton Dickinson.............55%..................76%............21%
Cardinal Health...............-17%....................1%............18%
Walgreens........................55%..................71%............16%
Medtronic........................22%..................37%............15%
Baxter.............................48%..................57%..............9%
Stryker..........................101%................107%..............6%
The Health Care Industry is rampant with large Corps that are able to continually reduce their effective income tax rates. Below here are the non-Dow, non-Health Insurance Big US Health Care Corps that had their Net Income From Continuing Operations percentage increases that have exceeded their related Pretax Income From Continuing Operations percentage increases in the 5 years from 2005 to 2010.
Pretax Income (PTI) vs Net Income (NI) % Growth (2005 to 2010)
........................................................................NI % Growth
.............................% Change......% Change........Higher Than
...............................in PTI............in NI............PTI % Growth
Biogen IDEC..............380%............458%.................78%
Gilead Sciences.........237%.............255%.................18%
Baxter........................31%...............49%..................18%
Stryker.......................85%.............101%..................17%
Amgen..........................9%..............26%..................17%
Covidien.....................17%..............32%..................15%
Abbott Labs................24%..............37%..................13%
Eli Lilly.....................140%.............153%..................13%
McKesson...................40%..............52%..................12%
Medtronic...................18%..............22%....................4%
Becton Dickinson........52%..............55%....................3%
HCA............................-4%...............-2%....................2%
And here is my subsequent research related to the extent that non-Dow Big US Financial Corps have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
.......................................Six Years 2005 to 2010
..................................Common Stock........Cash Flow
.....................................Buybacks.......From Operations.....%
...........................................(millions of dollars)
Charles Schwab.................4,657..................5,713..........82%
Aon..................................4,278..................5,305..........81%
Franklin Resources...........5,825..................8,275..........70%
Western Union..................3,043..................6,682..........46%
Chubb..............................7,947.................17,620.........45%
Visa*................................3,024..................7,675..........39%
T Rowe Price.....................1,484..................3,902..........38%
Progressive......................3,865.................10,525..........37%
Allstate............................9,337.................27,993..........33%
.......Weighted Average Number of Common Shares Outstanding
....................................2010...............2005........% Decrease
.....................................(millions of shares)
Chubb...........................322.................408...............-21%
Allstate.........................543.................667...............-19%
Progressive..................663..................799...............-17%
Franklin Resources.......222.................262...............-15%
Aon..............................298..................342...............-13%
Western Union.............669..................764...............-12%
Charles Schwab..........1,194..............1,308.................-9%
Visa*...........................707.................769.................-8%
Aflac...........................473..................508.................-7%
MasterCard..................131..................135.................-3%
T Rowe Price...............265..................273.................-3%
................EPS % Change vs NI of CI % Change (2005 to 2010)
...........................................................................EPS % Change
............................................................................Higher Than
.....................................NI of CI*..............EPS..........NI of CI
....................................% Change.........% Change....% Change
Visa*..............................392%................438%............46%
Chubb...............................19%..................51%............32%
Franklin Resources...........52%..................77%............25%
Aon..................................76%..................98%............22%
MasterCard......................591%................610%...........19%
Progressive......................-23%..................-7%............16%
Western Union...................-2%..................12%............14%
Allstate............................-47%.................-35%............12%
Aflac.................................58%..................70%............12%
Charles Schwab................-28%.................-21%..............7%
T Rowe Price.....................56%..................60%..............4%
* Visa's above earlier year is 2007, rather than 2005.
And here is my subsequent research related to the extent that extremely profitable Non-Dow US Big Corps, with Annual Pretax Income just short of $2 bil and above, and which are in Other Sectors which were not already covered above in this post, have overdosed on Common Stock Buybacks for just the most recent 6 years from 2005 to 2010:
...................................Six Years 2005 to 2010
..............................Common Stock.......Cash Flow
.................................Buybacks.......From Operations.....%
....................................(millions of dollars)
Texas Instruments......19,869................20,261............98%
Dell.............................17,946................22,438............80%
Gap...............................7,961..................9,966............80%
Time Warner...............25,538................32,942............78%
Applied Materials.........7,831................10,378............75%
Viacom........................8,176................11,024.............74%
Accenture..................12,754................17,796............72%
DirecTV......................14,983................21,526............70%
ADP.............................6,784..................9,834............69%
Phillip Morris*............15,911................25,256............63%
General Mills................6,790................10,861............63%
Best Buy.......................6,025................10,800............56%
TJX..............................4,990..................9,117.............55%
Deere...........................5,776................11,165..............52%
Nike..............................6,243................12,195.............51%
Colgate Palmolive.........7,106................14,600............49%
PepsiCo......................20,010................41,113.............49%
CSX...............................5,661................13,531.............42%
UPS.............................12,526................30,051............42%
Kimberly Clark..............6,558................16,062............41%
Illinois Tool Works........4,988................12,332............40%
Honeywell.....................8,474................21,504............39%
Costco...........................5,560................14,153............39%
Ebay..............................6,041................15,435............39%
Target..........................10,265................29,020...........35%
Praxair..........................3,742................11,296............33%
EMC...............................6,112................18,931............32%
Lowe's...........................7,916................24,719............32%
Oracle..........................14,151................45,613............31%
Qualcomm....................8,095................26,770...........30%
Norfolk Southern...........4,151................13,933............30%
* Phillip Morris above numbers are for the 3 years from 2008 to 2010.
.......Weighted Average Number of Common Shares Outstanding
....................................2010..........2005.....% Decrease
.....................................(millions of shares)
DirecTV.........................886..........1,395..........-36%
GPS................................641............902..........-29%
Texas Instruments......1,213..........1,671..........-27%
Time Warner...............1,145..........1,570..........-27%
Loews............................420............558..........-25%
Dell.............................1,955..........2,449..........-20%
Newscorp...................2,633..........3,228..........-18%
Target...........................729.............889..........-18%
TJX...............................406.............492..........-17%
Best Buy........................417.............505..........-17%
Accenture.....................742.............895..........-17%
Viacom.........................594.............716..........-17%
CSX...............................385.............456..........-16%
Applied Materials.......1,330..........1,565..........-15%
Comcast.....................2,820..........3,312..........-15%
ADP..............................498.............580..........-14%
Kimberly Clark..............414............477..........-13%
Deere............................429............493..........-13%
Lowes........................1,403..........1,607..........-13%
Phillip Morris*...........1,842..........2,109..........-13%
Illinois Tool Works.......503.............575..........-13%
General Mills................665.............758..........-12%
Halliburton...................911..........1,038..........-12%
EMC...........................2,148..........2,433..........-12%
Kroger..........................638.............731..........-13%
UPS...........................1,003...........1,116..........-10%
Norfolk Southern..........372.............412..........-10%
Emerson Electric..........754.............825............-9%
Honeywell....................781.............852............-8%
Colgate Palmolive.........511.............557............-8%
Nike.............................486.............528............-8%
Costco..........................443.............480............-8%
Devon Energy..............436.............470............-7%
Praxair.........................311.............330............-6%
Union Pacific................503............533............-6%
Carnival.......................805.............853............-6%
PepsiCo......................1,614..........1,706............-5%
Ebay..........................1,327..........1,394............-5%
Southern Copper..........850.............883............-4%
Oracle........................5,128..........5,287............-3%
Monsanto.....................542.............552............-2%
Altria Group*............2,079..........2,113............-2%
* Phillip Morris and Altria Group both have an earlier year above of 2007, rather than 2005.
................EPS % Change vs NI of CI % Change (2005 to 2010)
........................................................................EPS % Change
.........................................................................Higher Than
..................................NI of CI*..............EPS..........NI of CI
.................................% Change.........% Change....% Change
DirecTV........................621%...............945%..........325%
Comcast........................339%...............416%...........77%
Texas Instruments..........49%...............102%...........53%
Loews.............................36%.................86%...........50%
Gap..................................6%.................49%...........43%
TJX................................94%...............134%...........40%
Time Warner....................3%.................42%...........39%
CSX..............................117%...............150%...........38%
Accenture.....................77%...............114%............36%
Viacom..........................37%.................65%...........28%
Target............................21%.................48%...........26%
ADP...............................49%.................74%...........25%
Best Buy.........................12%.................36%...........24%
Applied Materials..........27%.................49%...........23%
General Mills.................65%.................86%...........21%
Deere............................32%.................52%...........20%
EMC..............................68%.................87%...........20%
Dell..............................-27%.................-8%............19%
Kimberly Clark..............17%.................34%...........18%
Newscorp........................6%.................24%...........17%
Union Pacific...............171%...............188%...........17%
Phillip Morris*..............20%.................37%...........17%
Kroger...........................16%.................33%...........16%
Illinois Tool Works..........3%.................18%...........15%
Colgate Palmolive..........63%................77%...........14%
Nike...............................53%................66%...........13%
Halliburton...................-15%.................-3%...........12%
Emerson Electric...........33%.................45%...........12%
Norfolk Southern...........17%.................29%...........12%
Honeywell.....................29%.................41%...........11%
Costco...........................33%.................43%...........11%
UPS..............................-10%...................0%...........10%
Praxair..........................63%.................73%...........10%
Lowe's..........................-27%................-18%.............9%
PepsiCo.........................55%.................64%.............9%
Oracle..........................153%...............161%.............8%
Ebay.............................66%.................74%.............8%
Devon Energy..............-20%...............-15%.............6%
Southern Copper...........11%.................15%.............4%
Carnival.......................-12%.................-9%.............4%
Monsanto....................139%..............143%.............3%
Qualcomm.....................85%...............88%.............2%
Altria Group*................25%...............26%.............2%
* Phillip Morris and Altria Group both have an earlier year above of 2007, rather than 2005.
When I review all of the above numbers, it is pretty clear to me that the Occupying Protesters are spot on.....the deck is clearly stacked in favor of the US Big Corps and their beneficiaries, nearly all 1%ers, who are amassing this incredibly lucrative wealth from the very simple financial engineering strategy of overdosing on Common Stock Buybacks.
The 99%, including all small US businesses and the overwhelming majority of all US businesses, either can't do this or fair-mindedly elect to not do this. And even worse, this US Big Corp Common Stock Buyback Overdosing negatively impacts the economic situation of all of the 99%, thereby markedly expanding the Wealth GAP between the 1% and the 99%.
It's not right.....not even close to being right. And the US Congress has consistently allowed, and even fostered, this devastatingly detrimental, greedy overdosing by US Big Corps on Common Stock Buybacks to happen.
The country's 99% is shouting out for the US Congress to completely reverse course and to start serving the entire country, instead of just the 1%. Many in the US Congress publicly claim that they are serving the entire country, but by their actions, they are consistently and clearly legislating for just the 1%. The only part of the US Government that is consistently attempting to serve the entire country is the Obama Administration, although even they do go off target on the US economy at times.
==================
Dow Industrials
3M 3M
AA Alcoa
ATT ATT
AXP American Express
BA Boeing
BAC Bank of America
CAT Caterpillar
CSCO Cisco
CVX Chevron
DD Dupont
DIS Walt Disney
GE GE
HD Home Depot
HPQ Hewlett Packard
IBM IBM
INTC Intel
JNJ JNJ
JPM JPMorgan Chase
KFT Kraft Foods
KO Coca Cola
MCD McDonalds
MRK Merck
MSFT Microsoft
PFE Pfizer
PG Procter & Gamble
TRV Travelers
UTX United Technologies
VZ Verizon
WMT Walmart
XOM Exxon Mobil
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