These 70 Pennsylvania Corps generated Total Pretax Earnings in 2011 of $41.2 bil, up a very robust 23% over 2010. And such Total Pretax Income in 2010 of $33.6 bil was up an off-the-charts 84% over 2009.
And when I exclude from Pretax Income the huge Derivative Gains and Losses of Pennsylvania Surety Insurance Corp Radian Group, these 70 Pennsylvania Largest Corps had their Total Pretax Income in 2011 increase by a lower 18% over 2010, and their Total Pretax Income in 2010 increase by a higher 88% over 2009.
And to give a complete update, these 70 Pennsylvania Largest Corps had their Total Pretax Income in the 1Q 2012 increase by only 1% over the 1Q 2011, going from $10,628 mil in the 1Q 2011 to $10,780 mil in the 1Q 2012. And the only reason that this wasn't an earnings decline is that Insurance Corp ACE Limited had huge catastrophe losses in the 1Q 2011.
And when I exclude from Pretax Income the huge Derivative Gains and Losses of Pennsylvania Surety Insurance Corp Radian Group, these 70 Pennsylvania Largest Corps had their Total Pretax Income in 2011 increase by a lower 18% over 2010, and their Total Pretax Income in 2010 increase by a higher 88% over 2009.
And to give a complete update, these 70 Pennsylvania Largest Corps had their Total Pretax Income in the 1Q 2012 increase by only 1% over the 1Q 2011, going from $10,628 mil in the 1Q 2011 to $10,780 mil in the 1Q 2012. And the only reason that this wasn't an earnings decline is that Insurance Corp ACE Limited had huge catastrophe losses in the 1Q 2011.
That is clearly a massive total earnings growth deceleration.....84% in 2010, 23% in 2011, and 1% in 1Q 2012. Something is clearly deteriorating here in Pennsylvania, just as it is in Wisconsin, Ohio, and in other US States.
I excluded Corps in the Development Stage, and ones generating losses for many years.
This distinction between 2010 earnings growth and the earnings growth in both 2011 and the 1Q 2012 is particularly salient since there was a major switch in Pennsylvania political party control between 2010 and 2011, which was precisely what also happened in both Wisconsin and Ohio.
In 2010, Pennsylvania's Governor was a Democrat and its State House was in Democratic control.....just like in both Wisconsin and Ohio.
On the other hand, in 2011 and in the 1Q 2012, Pennsylvania's Governor was a Republican and its State House was in Republican control.....just like in both Wisconsin and Ohio.
Pennsylvania's Democratic members of the State House numbered 104 of the total 203 in 2010, but only 91 of the total 203 in 2011 and in the 1Q 2012.....the same loss of Democratic majority that occurred in both Wisconsin and Ohio, with the 2010 election.
Nationally in 2010, the US House was under Democratic control. But in 2011 and in the 1Q 2012, the US House was under Republican control.
Pennsylvania's Democratic members of the US House numbered 12 of the total 19 in 2010, but only 7 of the total 19 in 2011 and in the 1Q 2012.....the same loss of Democratic majority that occurred in both Wisconsin and Ohio, with the 2010 election.
And Pennsylvania had 2 Democratic US Senators in 2010, but only 1 in 2011, just like in Wisconsin.
Let me first show below here the headquarters location of each of these 70 Largest Pennsylvania Corporations.
| Pennsylvania Largest Corps | Pennsylvania HQs |
| ACE Ltd | Philadelphia |
| Air Products & Chemicals | Allentown |
| Airgas | Radnor |
| Alcoa | Pittsburgh |
| Allegheny Technologies | Pittsburgh |
| American Eagle Outfitters | Pittsburgh |
| Amerigas Partners | Valley Forge |
| AmeriSource Bergen | Chesterbrook |
| Ametek | Berwyn |
| Ansys | Canonsburg |
| Aramark | Philadelphia |
| Armstrong World Industries | Lancaster |
| Comcast | Philadelphia |
| CONSOL Energy | Canonsburg |
| Crown Holdings | Philadelphia |
| Dentsply | York |
| DFC Global | Berwyn |
| Dick's Sporting Goods | Coraopolis |
| Education Management | Pittsburgh |
| EME Homer City Generation LP | Homer City |
| Endo Pharmaceuticals | Chadds Ford |
| EnerSys | Reading |
| EQT | Pittsburgh |
| Erie Indemnity | Erie |
| Federated Investors | Pittsburgh |
| FMC | Philadelphia |
| FNB Corp | Hermitage |
| Fulton Financial | Lancaster |
| Gardner Denver | Wayne |
| GNC Holdings | Pittsburgh |
| Harleysville Group | Harleysville |
| Harsco | Camp Hill |
| Hershey | Hershey |
| HJ Heinz | Pittsburgh |
| II-VI Inc | Saxonburg |
| ING USA Annuity & Life Insurance | West Chester |
| InterDigital | King of Prussia |
| Kennametal | Latrobe |
| Kulicke & Soffa | Philadelphia |
| Liberty Property Trust | Malvern |
| Lincoln National | Radnor |
| Matthews Intl | Pittsburgh |
| Mine Safety Appliances | Pittsburgh |
| Mylan Inc | Canonsburg |
| Natl Penn Bancshares | Boyertown |
| Penn National Gaming | Wyomissing |
| PNC Financial | Pittsburgh |
| PPG Industries | Pittsburgh |
| Radian Group | Philadelphia |
| Rite Aid | Camp Hill |
| Santander Holdings US | Wyomissing |
| SEI Investments | Oaks |
| Select Medical | Mechanicsburg |
| SunGard Data Systems | Wayne |
| Sunoco | Philadelphia |
| Sunoco Logistics Partners | Philadelphia |
| TE Connectivity | Philadelphia |
| Teleflex | Limerick |
| Toll Brothers | Horsham |
| Triumph Group | Berwyn |
| Unisys | Blue Bell |
| United Refining | Warren |
| United States Steel | Pittsburgh |
| Universal Health Services | King of Prussia |
| Urban Outfitters | Philadelphia |
| Viropharma | Exton |
| Vishay Intertechnology | Malvern |
| Weis Markets | Sunbury |
| Wesco Intl | Pittsburgh |
| Westinghouse Air Brake | Wilmerding |
And now let me show the Pretax Income (PTI) or Pretax Loss of each of these 70 Largest Pennsylvania Corps in the most recent three years, along with their earnings growth in the two most recent years.
| Solid | Solid | ||||
| Republican | Democratic | ||||
| State | State | ||||
| Control | Control | ||||
| PTI(L) | PTI(L) | ||||
| % | % | ||||
| Change | Change | ||||
| Total | Total | Total | 2011 | 2010 | |
| PTI(L) | PTI(L) | PTI(L) | vs | vs | |
| 2011 | 2010 | 2009 | 2010 | 2009 | |
| mils $s | mils $s | mils $s | |||
| Pennsylvania Largest Corps | |||||
| Comcast | 8,207 | 6,104 | 5,106 | 34% | 20% |
| PNC Financial | 4,069 | 4,061 | 2,149 | 0% | 89% |
| ACE Ltd | 2,091 | 3,667 | 3,077 | -43% | 19% |
| Air Products & Chemicals | 1,661 | 1,394 | 837 | 19% | 67% |
| TE Connectivity Ltd | 1,629 | 1,558 | (123) | 5% | 1367% |
| PPG Industries | 1,597 | 1,295 | 617 | 23% | 110% |
| Santander Holdings US | 1,523 | 1,019 | (1,123) | 49% | 191% |
| HJ Heinz | 1,374 | 1,290 | 1,320 | 7% | -2% |
| Lincoln National | 1,346 | 1,234 | 209 | 9% | 490% |
| AmeriSource Bergen | 1,131 | 1,028 | 824 | 10% | 25% |
| Alcoa | 1,063 | 548 | (1,498) | 94% | 137% |
| Hershey | 963 | 809 | 671 | 19% | 21% |
| CONSOL Energy | 904 | 468 | 788 | 93% | -41% |
| Mylan Inc | 704 | 483 | 453 | 46% | 7% |
| Universal Health Services | 696 | 481 | 475 | 45% | 1% |
| Crown Holdings | 587 | 614 | 459 | -4% | 34% |
| FMC | 572 | 432 | 356 | 32% | 21% |
| Ametek | 557 | 406 | 295 | 37% | 38% |
| EQT | 556 | 355 | 254 | 57% | 40% |
| Endo Pharmaceuticals | 468 | 456 | 336 | 3% | 36% |
| Airgas | 450 | 355 | 429 | 27% | -17% |
| Dick's Sporting Goods | 432 | 298 | 223 | 45% | 34% |
| Penn National Gaming | 389 | 230 | 204 | 69% | 13% |
| Gardner Denver | 387 | 232 | 124 | 67% | 87% |
| Radian Group | 369 | (1,580) | (242) | 123% | -553% |
| Education Management | 369 | 297 | 166 | 24% | 79% |
| Erie Indemnity | 358 | 999 | 524 | -64% | 91% |
| Sunoco Logistics Partners | 347 | 228 | 250 | 52% | -9% |
| Allegheny Technologies | 339 | 126 | 74 | 169% | 70% |
| Vishay Intertechnology | 331 | 406 | (40) | -18% | 1115% |
| SEI Investments | 318 | 370 | 362 | -14% | 2% |
| Kennametal | 296 | 77 | (12) | 284% | 742% |
| Urban Outfitters | 289 | 417 | 344 | -31% | 21% |
| Wesco Intl | 279 | 158 | 137 | 77% | 15% |
| Ansys | 265 | 216 | 174 | 23% | 24% |
| Dentsply | 256 | 358 | 363 | -28% | -1% |
| Westinghouse Air Brake | 255 | 187 | 163 | 36% | 15% |
| Federated Investors | 246 | 301 | 327 | -18% | -8% |
| American Eagle Outfitters | 237 | 295 | 304 | -20% | -3% |
| Triumph Group | 234 | 126 | 136 | 86% | -7% |
| Select Medical | 215 | 124 | 102 | 73% | 22% |
| Viropharma | 208 | 201 | 86 | 3% | 134% |
| GNC Holdings | 208 | 147 | 111 | 41% | 32% |
| Sunoco | 207 | 563 | (120) | -63% | 569% |
| Unisys | 206 | 223 | 218 | -8% | 2% |
| Fulton Financial | 196 | 173 | 89 | 13% | 94% |
| Armstrong World Industries | 193 | 89 | 93 | 117% | -4% |
| Amerigas Partners | 179 | 171 | 190 | 5% | -10% |
| Teleflex | 164 | 155 | 164 | 6% | -5% |
| Kulicke & Soffa | 162 | 140 | (77) | 16% | 282% |
| EnerSys | 151 | 87 | 119 | 74% | -27% |
| Liberty Property Trust | 132 | 125 | 125 | 6% | 0% |
| InterDigital | 125 | 238 | 113 | -47% | 111% |
| Aramark | 122 | 33 | (24) | 270% | 238% |
| FNB Corp | 119 | 103 | 50 | 16% | 106% |
| Weis Markets | 118 | 107 | 98 | 10% | 9% |
| Natl Penn Bancshares | 113 | 33 | (137) | 242% | 124% |
| Matthews Intl | 112 | 110 | 91 | 2% | 21% |
| Mine Safety Appliances | 105 | 57 | 65 | 84% | -12% |
| II-VI Inc | 102 | 51 | 46 | 100% | 11% |
| Harsco | 42 | 20 | 159 | 110% | -87% |
| United States Steel | 27 | (385) | (1,845) | 107% | 79% |
| Harleysville Group | 16 | 83 | 116 | -81% | -28% |
| Toll Brothers | (29) | (117) | (496) | 75% | 76% |
| SunGard Data Systems | (143) | (219) | (175) | 35% | -25% |
| Rite Aid | (392) | (546) | (480) | -14% | -14% |
| ING USA Annuity & Life Insurance | 399 | 26 | (133) | 1435% | -120% |
| DFC Global | 102 | 55 | 66 | 85% | -17% |
| United Refining | (11) | (115) | 54 | 90% | -313% |
| EME Homer City Generation LP | (75) | 38 | 111 | -297% | -66% |
| Total all 70 | 41,217 | 33,568 | 18,271 | 23% | 84% |
Because there was such an incredible difference in total earnings growth of these 70 Pennsylvania Largest Corps under Solid Democratic State Control (+84% in 2010) and under Republican State control (+23% in 2011 and +1% in the 1Q 2012 ), I decided to check out smaller Pennsylvania Corps, which file with the SEC, in order to see if this same pattern holds, as it also did in both Wisconsin and Ohio.
Thus, I found 29 Pennsylvania Smaller Corps filing with the SEC, which had Pretax Income or Pretax Loss of more than $40 mil in any of the most recent three years, and which weren't included in the 70 largest Pennsylvania Corps. Thus, these 29 Smaller Pennsylvania Corps also did not have Pretax Income or Pretax Loss of more than $100 mil in any of the most recent three years.
Now to the results of these 29 Smaller Pennsylvania Corps.
The Total Pretax Income of these 29 Smaller Pennsylvania Corps increased by a very nice 22% in 2011 as compared with 2010. On the other hand, the Total Pretax Income in 2010 increased by an off-the-charts 125% over 2009.
This earnings growth pattern divergence of these 29 Smaller Pennsylvania Corps was consistent with the earnings growth pattern divergence of the 70 Largest Pennsylvania Corps. And Pennsylvania's earnings growth pattern divergence was precisely what also happened in both Wisconsin and Ohio.
Thus clearly, Pennsylvania Corps of all sizes performed substantially better in 2010 under Solid Democratic State Control than in 2011 under Solid Republican State Control......just precisely what happened in both Wisconsin and Ohio.
It is pretty clear to me that in 2010, a Democratic President, coupled with a US House and a US Senate both in Democratic hands, and also coupled with a US State Governor and US State Legislature both in Democratic hands, did wonders for corporate earnings growth in that year. With this political structure, economic stimulus, both much needed business income tax stimulus and wise, carefully-vetted investment spending, can occur on a robust scale.
The worse thing that can happen after a financial meltdown, and near depression, is a US government that just waits for the free markets to correct themselves.....a laissez-faire approach, so favored by Republicans. Fortunately for the country, the exact opposite to that wisely happened in 2009 and 2010.
But then in 2011 and the first half of 2012, the US government was unfortunately forced into a laissez-faire economic approach, due to the US Congress stopping nearly every economic initiative of the Obama Administration. The focus of the US Congress was almost singularly on austerity, when the improving, but still clearly struggling, US economy was shouting out for more economic stimulus, wisely designed.
Thus, things stopped to a walk on the US economic front when the US House switched to Republican control with the 2010 election, coupled with certain US States like Pennsylvania, Ohio, and Wisconsin, also switching from Solid Democratic to Solid Republican Control.
Case in point is Business Income Tax Reform, which the Obama Administration strongly supports, and which nearly all Republicans say they are behind. If the President's Framework for Business Income Tax Reform, presented more than three months ago, is strengthened by the US Congress and passed, I am pretty certain that all of the US economic problems, including US real GDP growth, US unemployment, US underemployment, and the US Deficit....would all be substantially improved, and on an ongoing sustainable basis over the long run.
However, the US House Ways and Means Committee must initiate the legislation on this critically needed Business Income Tax Reform. And what have they done so far? Absolutely nothing. I'm not kidding. On the other hand, if the US House was under Democratic control, I am pretty certain that this Business Income Tax Reform would have gotten out of the US House Ways and Means Committee by now and been placed on the US House Floor.
Instead, the Republicans in the US House are focused on attempting to pass an extension of the much lower Bush income tax rates on the wealthy, which increases the US Deficit by more than a trillion dollars over the next decade, and creates almost no US jobs. This continual off-focus approach to governing by the Republicans in the US House shows that they are clearly unfit to be reelected, due to either their gross incompetence on US economic issues, or to their only be interested in governing for the top 1% of the country.
On the other hand, when the President is a Democrat and the US House is in Democratic control, economic initiatives move forward, and they clearly did very robustly in 2009 and 2010.
Given the above Pennsylvania corporate earnings growth numbers in 2010 vs. those subsequent to 2010, it is clearly in the economic interests of Pennsylvania Corporations of all sizes and all Pennsylvania citizens for a return to the 2010 days, when corporate earnings were on a tear. And the same goes for Wisconsin Corporations of all sizes and for all Wisconsin citizens. And the same also goes for Ohio Corporations of all sizes and for all Ohio citizens. And frankly, the same goes for all US Corporations of all sizes and for all US citizens in all US States.
While substantial US job creation doesn't necessarily result from substantially higher corporate earnings, I can clearly tell you one thing.....lower corporate earnings will undoubtedly result in a significant loss of US jobs. To give a recent illustration, when Hewlett Packard recently announced down earnings, it also announced it will be cutting 27,000 jobs, or 8% of its workforce. And Ohio-based Procter & Gamble, just recently taking a $452 mil Restructuring Charge, has to mean a significant loss of US jobs. And I have seen so many large Restructuring Charges made by Corporations in their 1Q 2012 Earnings Statements, made in the same quarter where their earnings growth has fallen off the cliff.
In deriving Pretax Income for these 29 Smaller Pennsylvania Corps, I start with Audited Pretax Income under Generally Accepted Accounting Principles (GAAP), and then exclude several clearly unusual very large items relative to Pretax Income, such as Asset Impairments, and Gains and Losses on both Debt Retirements and Asset Dispositions.
First, here is the HQs for each of these 29 Smaller Pennsylvania Corps:
| Pennsylvania Smaller Corps | Pennsylvania HQs |
| Ampco-Pittsburgh | Pittsburgh |
| Atlas Energy LP | Pittsburgh |
| Black Box | Lawrence |
| Calgon Carbon | Pittsburgh |
| Carpenter Technology | Wyomissing |
| Charming Shoppes | Bensalem |
| Citizens & Northern | Wellsboro |
| Dorman Products | Colmar |
| Entercom Communications | Bala Cynwyd |
| EPAM Systems | Newton |
| First Commwealth Financial | Indiana |
| Glatfelter PH | York |
| Globus Medical | Audubon |
| Healthcare Services Group | Huntington Valley |
| HFF | Pittsburgh |
| Horsehead Holding | Pittsburgh |
| iGATE | Pittsburgh |
| Knoll | East Greenville |
| Koppers Holdings | Pittsburgh |
| Northwest Bancshares | Warren |
| Nutri System | Fort Washington |
| Penn Virginia Resource Partners | Radnor |
| Pep Boys Manny Moe & Jack | Philadelphia |
| rue21 | Warrendale |
| S&T Bancorp | Indiana |
| Susquehana Bancshares | Lititz |
| TMS Intl | Glassport |
| VWR Funding | Radnor |
| West Pharmaceutical Services | Lionville |
And below here is the Pretax Income (PTI) or Pretax Loss of each of these 29 Smaller Pennsylvania Corps in the most recent three years, along with their earnings growth in the two most recent years.
| Solid | Solid | ||||
| Republican | Democratic | ||||
| State | State | ||||
| Control | Control | ||||
| PTI(L) | PTI(L) | ||||
| % | % | ||||
| Change | Change | ||||
| Total | Total | Total | 2011 | 2010 | |
| PTI(L) | PTI(L) | PTI(L) | vs | vs | |
| 2011 | 2010 | 2009 | 2010 | 2009 | |
| mils $s | mils $s | mils $s | |||
| Pennsylvania Smaller Corps | |||||
| Globus Medical | 97 | 88 | 82 | 10% | 7% |
| Penn Virginia Resource Partners | 96 | 64 | 63 | 50% | 2% |
| West Pharmaceutical Services | 93 | 75 | 83 | 24% | -10% |
| Northwest Bancshares | 91 | 81 | 40 | 12% | 103% |
| Knoll | 89 | 41 | 44 | 117% | -7% |
| Carpenter Technology | 88 | 5 | 63 | 1660% | -92% |
| VWR Funding | 88 | 98 | (40) | -10% | 345% |
| Dorman Products | 85 | 75 | 43 | 13% | 74% |
| Atlas Energy LP | 78 | 44 | (6) | 77% | 833% |
| Black Box | 72 | 85 | 54 | -15% | 57% |
| iGATE | 71 | 58 | 37 | 22% | 57% |
| HFF | 64 | 26 | 4 | 146% | 550% |
| rue21 | 63 | 50 | 36 | 26% | 39% |
| S&T Bancorp | 62 | 58 | 4 | 7% | 1350% |
| Healthcare Services Group | 58 | 54 | 49 | 7% | 10% |
| Susquehana Bancshares | 57 | 33 | 2 | 73% | 1550% |
| Calgon Carbon | 56 | 60 | 50 | -7% | 20% |
| EPAM Systems | 53 | 31 | 14 | 71% | 121% |
| Koppers Holdings | 53 | 74 | 58 | -28% | 28% |
| Entercom Communications | 52 | 67 | 47 | -22% | 43% |
| Glatfelter PH | 51 | 34 | 35 | 50% | -3% |
| Pep Boys Manny Moe & Jack | 42 | 58 | 38 | -28% | 53% |
| TMS Intl | 42 | 18 | (31) | 133% | 158% |
| Ampco-Pittsburgh | 35 | 45 | 45 | -22% | 0% |
| Citizens & Northern | 32 | 25 | (62) | 28% | 140% |
| Horsehead Holding | 27 | 39 | (44) | -31% | 189% |
| Nutri System | 19 | 53 | 46 | -64% | 15% |
| First Commwealth Financial | 15 | 23 | (46) | -35% | 150% |
| Charming Shoppes | 0 | (40) | (76) | 100% | 47% |
| Total all 29 | 1,729 | 1,422 | 632 | 22% | 125% |
