Tuesday, July 31, 2012

US Smaller Technology Corps Crushed Again in the 2Q 2012 By US Congressional Republicans

I found 54 US Technology Corps, which file with the SEC, which have already reported their calendar June 2012 quarter earnings, and with Pretax Income or Loss of more than $100 mil in any of the following quarters: 2Q 2012, 1Q 2012, 2Q 2011, or 1Q 2011.

These 54 US Technology Corps generated Total Pretax Income in the 2Q 2012 of $55.2 bil, an increase of 6% from the 2Q 2011.  This was a significant deceleration from the 1Q 2012 earnings growth over the 1Q 2011 of 15%.

But you need to break down the earnings of these companies to get to the salient story.

Apple dominates these US Technology companies.  Here’s the Pretax Income growth of Apple for the most recent six quarters over the prior year’s quarter:

1Q 2011……+96%
2Q 2011…..+123%
3Q 2011…....+61%
4Q 2011….…119%
1Q 2012……+97%
2Q 2012……+24%

Apple is truly a great company with great products.  However, it is mathematically impossible to continue growing its earnings like it did in the above shown five quarters from 1Q 2011 to 1Q 2012.  When the earnings numbers become so incredibly high, the earnings growth has to come down.  We saw this in company after company when the Tech Bubble burst in 2000.

So yeah, Apple was a major contributor to the 2Q 2012 earnings growth deceleration of these 54 Technology companies.

Two Technology companies.....Seagate Technology and Western Digital.....,with more than half of their sales in the Asia Pacific Region, had their supply disrupted in the 2Q 2011 by the Japanese Earthquake and Tsunami.  Thus their blowout earnings growth in the 2Q 2012 over the 2Q 2011 totaling a massive 507% is a bit inflated.

You are now left with 51 of these 54 Technology companies.  

When you drill down more, you have 11 of them with Pretax Income above $1 bil in either the 2Q 2012 or the 2Q 2011, and you have the remaining 40 of them with Pretax Income under $1 bil.

These larger 11 Tech companies had their Total Pretax Income in the 2Q 2012 grow by 3% over the 2Q 2011, a shade above the 2% total earnings growth in the 1Q 2012 over the 1Q 2011.

But these 40 Smaller Tech companies had their Total Pretax Income in the 2Q 2012 decline by 18% from the 2Q 2011.  And 24 of these 40 Smaller Tech companies, or 60% of them, had earnings declines in the 2Q 2012 from the prior year’s quarters.

So, how did these same 40 Smaller Tech companies do in the 1Q 2012?  Well, a bit worse, with their Total Pretax Income declining by 23% from the 1Q 2011.

So what is causing this massive earnings growth deceleration in the past six quarters?  After all, when you go back to a 3Q 2011 posting I made, the 60 largest US Technology companies other than Apple, had the following massive total earnings growth deceleration over the prior year’s period:

Annual 2010 over Annual 2009…..+49%
1Q 2011 over 1Q 2010………..…....…+17%
2Q 2011 over 2Q 2010……….....……..+9%
3Q 2011 over 3Q 2010………….....…..+6%

And then you see the above 51 US Tech companies (all other than Apple, Seagate Technology and Western Digital) had the following total earnings declines over the prior year’s quarter in the most recent three quarters:

4Q 2011 vs 4Q 2010……………down 2%
1Q 2012 vs 1Q 2011……….……down 5%
2Q 2012 vs 2Q 2011……………down 2%

Well, certainly a very weak European economy, coupled with the weak Euro resulting in these profits getting translated into a stronger US dollar, is causing havoc on the earnings of US Technology companies which have a significant presence in Europe.

But there is a much more significant explanation for this earnings deterioration in 2011 and the first half of 2012.  

I think this massive earnings deterioration in 2011 and the first half of 2012 is due predominately to the switch from Moderate Democratic control to an Ultra Conservative Republican control, particularly in the US House.

The US economy stopped to a walk by the US House Republicans stopping, and the US Senate Republicans filibustering, nearly every Obama Administration economic initiative.  And the House Republicans abandoning the Grand Bargain Talks with the Obama Administration, the subsequent US Debt downgrade, and the unsuccessful Super Committee, all clearly showed that the US Congress could not get anything of substance done, and this severely harmed the US economy.

And the killing of the 100% first-year tax depreciation on equipment purchases in 2012 had a very harmful impact on US Technology and US Manufacturing companies.

The US economy is shouting out for bold, targeted, quick-hitting fiscal measures like the 100% first-year tax depreciation on equipment and computer software, highly accelerated first-year tax depreciation on buildings and building remodelings, and even lucrative investment tax credits on equipment, building, and computer software investments.  And it only makes sense to put in some measures which allow these very lucrative business tax incentives only if these companies increase their US payroll counts, which must be retained for a reasonable number of years or the tax benefits are recaptured.

And the first-year tax depreciation measures would be particularly explosive in the remainder of 2012 when combined with President Obama’s Business Tax Reform, which reduces business income tax rates starting in the following year.

But most US Congressional Republicans, in a Mean-Spirited Party over Suffering People Strategy, are stubbornly determined to keep the US economy from improving and US job creation from occurring at least until after the upcoming November 2012 election.  They are fervently praying for an increase in the US Unemployment Rate in July, August, September and October 2012.  They think that will cause voters to remove President Obama from office.

But you know what?  If Mitt Romney is elected President, and if the US Senate and the US House are both in Republican control, I am pretty certain you will see the US Unemployment Rate continue to rise, and average in the low double digit percentages for the last three years of Romney’s Presidential term.

Why?  Because even though the US economy is substantially better than it was at the end of 2008, it is still very fragile.  And Romney’s main economic plan is to simply reduce the income tax rate sharply on both Corporations and the wealthy, and to let that trickle down to US job creation.

How incredibly na├»ve!  US businesses have consistently shown that when they get a no-strings-attached reduction in the tax rate, they hire no one.  Thus, the US Deficit will balloon further, US unemployment will continually rise, US underemployed will rise, the middle class will shrink further, and the poor will be crushed.  And the gap between the very rich and everyone else will be substantially expanded further.

The only good thing about the above scenario is that with these disastrous economic effects occurring in the next four years, US citizens will be shouting out for Obama’s return to office in 2016.....and the election would be a landslide.

======================

In deriving Pretax Income, I start with Pretax Income under Generally Accepted Accounting Principles (GAAP), and then exclude several clearly unusual very large items relative to Pretax Income, such as Long-term Asset Impairments, and Gains and Losses on both Debt Retirements and Asset Dispositions.

I use Pretax Income rather than After-tax Net Income, since so much of the change in effective income tax rates just happens due to financial engineering.

Below here is the Pretax Income (PTI) or Pretax Loss of each of these 54 US Technology companies for the 2Q 2012 and the 2Q 2011.





Increase Increase

PTI PTI (Decrease) (Decrease)

2Q 2012 2Q 2011 Amount %

mils $s mils $s mils $s
Technology Corps

Apple 11,861 9,551 2,310 24%





Supply Disruptions Caused by Japan Equake and Tsunami in 2011
Seagate Technology 1,013 129 884 685%
Western Digital 801 170 631 371%
Total of Both 1,814 299 1,515 507%





PTI > $1 Bil



Microsoft 6,552 6,319 233 4%
IBM 5,161 4,885 276 6%
Oracle 4,382 4,170 212 5%
Intel 3,934 3,931 3 0%
Google 3,639 3,085 554 18%
Cisco Systems 2,779 2,203 576 26%
Hewlett Packard 1,979 2,892 (913) -32%
Qualcomm 1,581 1,274 307 24%
Intuit 1,104 1,052 52 5%
Accenture 1,066 958 108 11%
Dell 792 1,170 (378) -32%
Total all 11 32,969 31,939 1,030 3%





PTI < $1 Bil



EMC 904 764 140 18%
Ebay 733 604 129 21%
Texas Instruments 576 909 (333) -37%
Applied Materials 387 686 (299) -44%
CA 370 333 37 11%
Xerox 351 434 (83) -19%
Facebook 336 399 (63) -16%
Thermo Fisher Scientific 318 255 63 25%
KLA Tencor 306 334 (28) -8%
Adobe Systems 295 259 36 14%
Agilent Technologies 293 260 33 13%
Motorola Solutions 240 190 50 26%
Symantec 237 257 (20) -8%
NetApp 215 208 7 3%
VMware 214 190 24 13%
Analog Devices 211 297 (86) -29%
Paychex 198 184 14 8%
Check Point Software 190 161 29 18%
SAIC 183 207 (24) -12%
Broadcom 163 250 (87) -35%
Roper Industries 163 155 8 5%
Altera 159 238 (79) -33%
Maxim Integrated Products 158 184 (26) -14%
Xilinx 155 180 (25) -14%
Flextronics 149 153 (4) -3%
Amazon.com 146 225 (79) -35%
Linear Technology 141 175 (34) -19%
Cerner 139 111 28 25%
Jabil Circuit 129 127 2 2%
F5 Networks 112 90 22 24%
Marvell Technology 95 148 (53) -36%
Juniper Networks 89 157 (68) -43%
Citrix Systems 86 101 (15) -15%
Nvidia 77 156 (79) -51%
Tech Data 76 66 10 15%
Yahoo 75 185 (110) -59%
Lam Research 63 137 (74) -54%
Lexmark 52 131 (79) -60%
Sandisk 19 365 (346) -95%
Micron Technology (222) 164 (386) -235%



Total all 40 8,581 10,429 (1,848) -18%



Grand Total all 54 55,225 52,218 3,007 6%

Friday, July 27, 2012

US Big Retail Corps 2Q 2012 Earnings Up 6% vs Up Only 1% in 1Q 2012...But...

I found 35 US Retail Corps, which file with the SEC, which have already reported their calendar 2Q 2012 earnings, and which generated Pretax Income or Pretax Loss of more than $200 mil in any of these 4 quarters: 2Q 2012, 1Q 2012, 2Q 2011 and 1Q 2011.

The one large Retail Corp excluded is Publix Super Markets, which hasn't released its 2Q 2012 earnings yet.


These 35 US Retail Corps had Total Pretax Income in the 2Q 2012 of $19,193 mil, up $1,039 mil, or up 6%, from the 2Q 2011, which is pretty impressive in these pretty tough economic times in the US, and extremely tough economic times in Europe.

But you need to break down these Corps to get a better handle on what is happening in Retailing.

In the 2Q 2012, the Total Pretax Income increase of these 35 US Big Retailers was $1,039 mil over the 2Q 2011.  And in the 1Q 2012, this increase was only $205 mil.  Thus, the improvement in the 2Q 2012 over the 1Q 2011 is the difference, or $834 mil.

Amazingly, $785 mil of this improvement, or a massive 94%, is due to one Retailer...Sears Holding...which went from a 1Q 2012 Pretax Income decline of $674 mil to a 2Q 2012 earnings improvement of $111 mil.  Its April 2012 quarter sales comparable declines were much less pronounced than those experienced in the January 2012 quarter. 

Walmart dominates these 35 US Big Retailers, comprising over 30% of 2Q 2012 Total Pretax Income of all 35.  Walmart had a very strong 2Q 2012, with Pretax Earnings growth of 9% over the prior year's quarter, and an acceleration from the 5% Pretax Earnings growth in the 1Q 2012 over the 1Q 2011. 

So, what happened with the Remaining 33 US Big Retailers?  Well, their Total Pretax Income growth of 3% in the 1Q 2012 over the 1Q 2011 remained  precisely constant in the 2Q 2012 over the 2Q 2011.

Extreme weakness in the European economy, coupled with a weaker Euro, hindered the US Big Retailers with a large presence there like McDonalds. 

And JC Penney and Best Buy both had down quarters.

The stick-out winners of these Remaining 33 Retailers were the ones in Home Improvement.....Home Depot, Sherwin Williams, and Lowes...and also TJX, Dollar General, Macy's, Ross Stores, Starbucks and Costco.


It should also be pointed out that the 2Q 2012 Earnings Per Share growth of these 35 Big US Retailers is a bit higher than this 6% Total Pretax Earnings growth.  This is due to many of these large US Retailers having substantial stock buyback programs.

For instance, the GAP had a 2% Pretax Earnings decline in the 2Q 2012, which was a substantial improvement from its 41% earnings decline in the 1Q 2012.  The GAP's Pretax Earnings decline of 2% in the most recent quarter changes dramatically to an 18% increase on an Earnings Per Share basis.  No, I'm not kidding.  This is what the GAP's massive stock buyback program does.

Still, the US economy is in severe need of an upward jolt.  But no matter what they say publicly, it is clear that the Republicans in the US House and US Senate are determined to prevent any US economic lift until after the November 2012 election.....a clearly heartless, mean-spirited Party over suffering People strategy. 

And if the Republicans in the US House either vote down, or don't permit a vote on, the US Senate recently passed tax cuts for everyone, starting on January 1, 2013, on the first $250,000 of everyone's taxable income, US Retailers will be hurt markedly by the resultant high level of consumer uncertainty, particularly in the critically key Thanksgiving to Christmas sales period. 

Below is the Pretax Income and Pretax Loss of these 35 Big US Retailers for both the 2Q 2012 and the 2Q 2011.





Increase Increase

PTI PTI (Decrease) (Decrease)

2Q 2012 2Q 2011 Amount %

mils $s mils $s mils $s





Walmart 5,852 5,378 474 9%
Sears Holding (134) (245) 111 45%





The Remaining 33


McDonalds 2,010 2,066 (56) -3%
Home Depot 1,630 1,283 347 27%
Target 1,101 1,081 20 2%
Lowes 850 740 110 15%
TJX 681 499 182 36%
Kroger 673 673 0 0%
Costco 622 534 88 16%
Starbucks 492 410 82 20%
Yum Brands 435 384 51 13%
Autozone 388 353 35 10%
GAP 373 381 (8) -2%
Dollar General 346 267 79 30%
Ross Stores 338 282 56 20%
Sherwin Williams 328 257 71 28%
Bed Bath & Beyond 312 290 22 8%
Macy's 279 214 65 30%
Staples 277 302 (25) -8%
Nordstrom 240 241 (1) 0%
Kohls 239 315 (76) -24%
Best Buy 235 449 (214) -48%
OReilly Automotive 235 217 18 8%
Advance Auto Parts 215 176 39 22%
Limited Brands 213 213 0 0%
Darden Restaurants 201 186 15 8%
CarMax 196 203 (7) -3%
Family Dollar Stores 194 178 16 9%
Dollar Tree 189 162 27 17%
Safeway 178 219 (41) -19%
Amazon 146 225 (79) -35%
Tiffany 124 126 (2) -2%
GameStop 115 125 (10) -8%
Toys R Us (98) (133) 35 26%
JC Penney (282) 103 (385) -374%





Total all 33 Remaining 13,475 13,021 454 3%





Total all 35 19,193 18,154 1,039 6%

Thursday, July 26, 2012

Drop in Exxon Mobil Core Earnings Great For US and World Economies

Exxon Mobil just released its 2Q 2012 earnings.

It doesn't disclose a detailed income statement until it files its 10Q with the SEC a bit later.

So, all that can be determined at this point in time is that it reported 2Q 2012 After-tax Net Income of $15,910 mil.  However, that amount included huge Net Gains on Divestitures and Tax-Related Items, which totaled an increase in After-Tax Net Income of a massive $7.5 bil.  Thus exclusive of these two huge items, what I call Exxon Mobil's Core Net Income was $8.4 bil in the 2Q 2012, which was a 21% decline from the $10.68 bil of After-tax Net Income generated in the 2Q 2011. 

I like to focus on Core Pretax Income trends, because it excludes any changes in effective tax rate, which can be volatile, and are a function of financial engineering.

I'm not able to get a handle on Exxon Mobil's Core Pretax Income in the 2Q 2012, since it didn't break down the huge $7.5 bil huge pickup in earnings between how much was due to Pretax Income and how much was due to Income Tax Items.

But here is the quarterly trend in Exxon Mobil's Core Pretax Income from the start of 2011, shown as an increase or decrease over such Core Pretax Income in the prior year's quarter.

1Q 2011 vs 1Q 2010.....+57%
2Q 2011 vs 2Q 2010.....+46%
3Q 2011 vs 3Q 2010.....+45%
4Q 2011 vs 4Q 2010.....+11%
1Q 2012 vs 1Q 2011.....down 7%

And here is the quarterly trend in Exxon Mobil's Core After-tax Net Income from the start of 2011, shown as an increase or decrease over such After-tax Net Income in the prior year's quarter.

1Q 2011 vs 1Q 2010.....+66%
2Q 2011 vs 2Q 2010.....+41%
3Q 2011 vs 3Q 2010.....+41%
4Q 2011 vs 4Q 2010.......+2%
1Q 2012 vs 1Q 2011.....down 10%
2Q 2012 vs 2Q 2011.....down 21%


I think it's really good economic news to the improving, but still struggling, US economy, and also to the very struggling world economies, to see this marked downturn in Exxon Mobil's quarterly earnings, which is at least somewhat correlated with oil prices, and the resultant gas prices at the pump.

Certainly there are many factors here at play.  But I would like to point out two of them.

First, I think that President Obama's actions, under the radar screen, to soften the excessive amount of oil speculation has played a key role in moderating oil prices, and also resulted in much lower gas prices at the pump.

And second, I think that some consumers in the US, and around the globe, have decided to avoid, as best they can, the very powerful Exxon Mobil at the gas pump.  In the US, some citizens are just fed up with Exxon Mobil's dominance of the US Congress, and with the unwarranted massive annual tax subsidies bestowed on them by the US Congress, and thus took it in their own hands at the gas pump.

Wednesday, July 25, 2012

US Big National/Regional Banks 2Q 2012 Earnings Down 3%, With Much Noise

Other than the ones included in the Big 8 Financials, which I covered in an earlier post, I found 12 US National/Regional Banks, which file with the SEC, which have already reported their 2Q 2012 earnings, and which generated Pretax Income of more than $200 mil in either the 2Q 2012 or the 2Q 2011.

These 12 US Big National/Regional Banks had their Total Pretax Income in the 2Q 2012 decline by 3% from the 2Q 2011, which was a marked earnings reversal from the 10% earnings growth experienced by these same 12 Banks in the 1Q 2012 as compared with the 1Q 2011.

And there was a lot of noise in these 2Q 2012 earnings reports, as follows:

·                    Bank of New York Mellon reported a Special Pretax Litigation Charge in the 2Q 2012 of $350 mil, which I excluded in the Pretax Income numbers below.
·                    PNC Financial reported a Pretax Charge from Redemption of Preferred Securities in the 2Q 2012 of $130 mil, which I excluded in the Pretax Income numbers below.  PNC also reported Provisions for Residential Mortgage Loan Repurchase Obligations in the 2Q 2012 of $438 mil, which I included in the Pretax Income numbers below.
·                    BB&T benefited from much higher Mortgage Banking Income and Insurance Income in the 2Q 2012.
·                    Fifth Third Bancorp’s PTI numbers in both years exclude Gains from revaluing its Warrant in Vantiv.
·                    Regions Financial benefited from reporting a substantially lower Provision for Loan Losses…..$26 mil in the 2Q 2012 and $398 mil in the 2Q 2011.
·                     SunTrust Banks also benefited from reporting a lower Provision for Credit Losses…..$300 mil in the 2Q 2012 and $392 mil in the 2Q 2011.
·                    M&T Bank’s 2Q 2011’s Pretax Income amount below excludes a $65 mil Acquisition Gain.

But the most significant noise of all was Capital One Financial, whose 2Q 2012 earnings included a $1,200 mil earnings charge for a Loan Loss Allowance established as a result of its acquisition in 2012 of HSBC US’ credit cards.  I think there is something wrong with US Generally Accepted Accounting Principles, or the way they are being applied, if Capital One Financial, as well as other financial firms, are able to book this huge charge all at once, which is considered by many as a one-off, and then subsequently fine-tune down the resultant Reserve Allowance, thereby being able to increase their future earnings for many quarters…..a bit of an accounting flim-flam, I think.

I included this $1,200 mil charge in Capital One Financial’s Pretax Income below.

I excluded from Capital One Financial’s 2Q 2011 Pretax Income its Bargain Purchase Gain of $594 mil.

I don't think it is good for the US economy for the two largest traditional banks to have their earnings growth in the 2Q 2012.....Wells Fargo at 17% and US Bancorp at 19%.....which is so much better than the 3% total earnings decline of these 12 much smaller banks.

Below here is the Pretax Income (PTI) of these 12 US Big National/Regional Banks for the 2Q 2012 and the 2Q 2011.





Increase Increase

PTI PTI (Decrease) (Decrease)

2Q 2012 2Q 2011 Amount %

mils $s mils $s mils $s
US National/Regional Banks


Bank NY Mellon 939 1,034 (95) -9%
PNC Financial 849 1,146 (297) -26%
BB&T 729 418 311 74%
State Street Corp 652 715 (63) -9%
Fifth Third Bancorp 509 477 32 7%
Regions Financial 477 45 432 960%
SunTrust Banks 368 237 131 55%
M&T Bank 352 383 (31) -8%
Key Corp 288 346 (58) -17%
Northern Trust 266 230 36 16%
Capital One Financial 236 801 (565) -71%
Huntington Bancshares 202 195 7 4%



Total all 12 5,867 6,027 (160) -3%

Big Eight US Financial Corps 2Q 2012 Earnings Down 11%

When I think of the US Big Financial Corps, eight of them come top of mind.

In the 2Q 2012, the Total Pretax Income of these 8 US Big Financial Corps was down 11% from the 2Q 2011, after being down 9% in the 1Q 2012 from the 1Q 2011.

The traditional banks.....Wells Fargo and US Bancorp.....did just fine.  So did the Financial Sector of GE, which reports separately with the SEC.

But all of the others, where principal trading is a significant chunk of their business, had down earnings from the prior year's quarter.

JPMorgan Chase reported 2Q 2012 Pretax Earnings which were down $1,127 mil from the 2Q 2011.  It identified $5,060 mil of Pretax Trading Losses made by its CIO's sector in its synthetic credit portfolio.  It was able to soften the blow to its 2Q 2012 earnings by pushing back $640 mil of these trading losses to its already reported 1Q 2012 earnings.  Thus, the Pretax trading losses reducing its 2Q 2012 earnings was $4.4 bil.

Derivatives are a zero-sum game.  I'd be very interested in finding out which companies were on the other side of these massive $5,060 mil of JPMorgan Chase's derivative losses.

It's pretty clear to me that all derivatives, which are clearly deemed speculative in nature, should be disallowed in the US.  If this would have been the case, there would not have been the horrible financial meltdown in the US in 2008, which continues to play havoc on US Unemployment, US Underemployment, US economic growth, and the massive US Deficit.  The US Financial Accounting Standards Board has already done an excellent job at defining effective hedge derivatives and speculative derivatives.  There is clearly nothing wrong with derivatives that are effective hedges.


The only part of the US Government which is effectively working to clean up the horrible economic mess caused by the financial industry is the Obama Administration.

The Republicans in the US House and in the US Senate just repeatedly attack the Obama Administration, with so many naive and inaccurate assertions, on this issue.  With their lack of financial expertise, they have nothing in the way of wise recommendations to help, thus they elect to take the low road with continuing bombastic, sarcastic, irrelevant attacks.

US citizens want results from the US Congress, not just attacks.  And US citizens are flat out sick and tired of the repeated unprofessional, unreasonable, irrational, bombastic attacks on US Treasury Secretary Tim Geithner and Fed Chairman Ben Bernanke in televised US House and US Senate Financial Hearings by nearly all of the US House Republicans and also by some US Senate Republicans.

This is one of the many reasons the US Congress has such low approval ratings.  The US economy will not be great again, unless there is a major reconfiguration in the US Congress in the upcoming November 2012 election.  The Obama Administration cannot do it alone.  It needs help from the US Congress. 

And it is also the reason the US Congress, which is so devoid of members with savvy financial expertise, needs new members like Massachusetts' US Senate Candidate Elizabeth Warren, whose very strong financial expertise would put her at the very top of the present US Congress.


With these massive $5,060 mil of trading losses, JPMorgan Chase would have to find ways to soften the impact of this on its 2Q 2012 earnings.  And did they ever.

First, as stated earlier, it shoved $660 mil of these trading losses to its 1Q 2012 earnings, by restating these earlier reported earnings.

And second, just like many other companies, it focused on areas where the measurements are very subjective.....specifically, its Estimated Reserves.

In JPMorgan Chase's case, there are three huge subjective Reserve areas.....Credit Losses, Litigation and Income Tax.

JPMorgan Chase decided to reduce its Provision for Credit Losses from the $1,810 mil included in its 2Q 2011 earnings down to only the $214 included mil in its 2Q 2012 earnings.....a massive reduction of $1,596 mil.

JPMorgan Chase also decided to reduce its Litigation Expenses from the $1,900 mil included in its 2Q 2011 earnings down to only $300 mil included in its 2Q 2012 earnings.....a massive reduction of another $1,600 mil.

Yeah, when you combine these two expense reductions, it yields $3,196 mil.  And then when you also include the $660 mil of trading losses moved to the 1Q 2012, this yields a total of $3,856 mil.  Yeah, that's a magical $3,856 mil income recovery of the total $5,060 mil of Pretax Trading Losses.


And to top it off, JP Morgan Chase elected to reduce its effective income tax rate, the rate reflected in its Total Income Tax Expense included in its earnings, from 33.2% in the 2Q 2011 to 29.1% in the 2Q 2012.  JPMorgan Chase has a massive $8.9 bil of Income Tax Reserve on its books, higher than any other US company.  This Income Tax Reserve is the Estimated Tax Liability to cover all of its income tax audits.  With such a huge subjective number covering so many income tax issues, it is easy to fine tune this computation each quarter.   


OK, enough on JPMorgan Chase.  Let me move to Bank of America.

When Bank of America reported its 2Q 2011 disastrous earnings report, it showed a Pretax Loss of $12.6 bil.  Yeah, that's not a misprint, it's $12.6 bil in only one quarter.

And in its 2Q 2011 earnings release, it detailed more than $18.2 bil of adjustments, which turned this Generally Accepted Accounting Principles (GAAP) Pretax Loss of $12.6 bil into a Non-GAAP Pretax Profit of $5.6 bil.

The main items included in this long list of $18.2 bil of Non-GAAP adjustments were $14.0 bil of Provisions for Mortgage-related Representations and Warranties.  This $14.0 bil of Provisions was comprised of $8.6 bil related to the resolution of nearly all of the legacy Countrywide-issued first-lien, non-GSE Residential Mortgage-backed Securization (RMBS) Repurchase Exposures, as well as $5.4 bil related to other non-GSE and GSE exposures.

So when Bank of America released its 2Q 2012 earnings report, it reported a Pretax Income of $3,147 mil in the 2Q 2012 and a Pretax Loss of $12,875 mil in the 2Q 2011.

Bank of America did not include that same key $18.2 bil of detailed adjustments, nor its Non-GAAP Pretax Income for the 2Q 2011 in its 2Q 2012 earnings release.  It did mention some of its main items in this list in its 2Q 2012 earnings release.  Seems very strange to me.....not really being fully transparent on something so key to evaluating the company's earnings.

In my Pretax Income numbers below, I reflected Bank of America's $18.2 bil of Non-GAAP income adjustments in deriving my 2Q 2011 Core Pretax Income number.


Below here is the Pretax Income (PTI) of each of these 8 US Big Financial Corps for the 2Q 2012, and as compared with the 2Q 2011.





Increase Increase

PTI PTI (Decrease) (Decrease)

2Q 2012 2Q 2011 Amount %

mils $s mils $s mils $s
US Big 8 Financial



Wells Fargo 7,092 6,073 1,019 17%
JPMorgan Chase 7,000 8,127 (1,127) -14%
Citigroup 3,702 4,299 (597) -14%
Bank of America 3,147 5,325 (2,178) -41%
GE Capital Services 2,238 1,981 257 13%
US Bancorp 1,942 1,637 305 19%
Goldman Sachs 1,415 1,612 (197) -12%
Morgan Stanley 940 1,970 (1,030) -52%



Total all 8 27,476 31,024 (3,548) -11%


Sunday, July 22, 2012

California Largest Corp 2011 Annual Earnings Up 85% Since 2009 Under Obama: An Update

From an extensive, very time-consuming review, I found a very large number.....202.....of California Corporations, which file with the SEC, which had Pretax Income or Pretax Loss of at least $100 mil in any of the most recent three fiscal years.

And in an earlier very recent post, I found a very large number.....130.....of Smaller California Corporations, which file with the SEC, which had Pretax Income or Pretax Loss of at least $40 mil in any of the most recent three fiscal years, and which also didn't generate Pretax Income or Pretax Loss of $100 mil or more in any of the most recent three years. 

Clearly, California rules the country in the number of both Largest and Smaller Corps.

These 202 Largest California Corps generated Total Pretax Income of $275 bil in their most recent 2011 fiscal year ends, which was a very robust 85% higher than such earnings achieved two years ago in their 2009 fiscal years ends.

And the 130 Smaller California Corps generated Total Pretax Income of $2.4 bil in their most recent 2011 fiscal year ends, which was a massively off-the-charts 1,431% higher than such earnings achieved two years ago in their 2009 fiscal years ends.

Clearly, California citizens should be very proud of their many superb California companies, of all sizes.

And yeah, the Obama Administration created a very robust US economic environment, which permitted these fine California companies to do just fantastically on the earnings front in the most recent two years.  I find it incredible that nearly half of the country, including many California citizens, believe that the Obama Administration has just been horrible to US businesses of all sizes.  The above earnings growth numbers show just how out of touch to reality these people are.

Also, the many US House members from California, and particularly Nancy Pelosi, as well as California's very fine two US Senators.....Barbara Boxer and Dianne Feinstein.....played key roles in supporting their superb California companies, of all sizes, which helped them to generate these incredible earnings growth percentages in the most recent two years.

But there is another key story here.  To get to it, you need to break down the earnings growth by year and by sector.

And when you do that, there is just an incredible story.

These 202 Largest California Corps had their Total Pretax Income increase by 23% in 2011 over 2010, when John Boehner was US House Speaker, and the Republicans controlled the US House.  But in 2010, when Nancy Pelosi was US House Speaker and the Democrats were in control of the US House, the total earnings growth of these 202 Largest California Corps was more than double this 23% earnings growth, or up a very robust 50% over 2009.  Also, in the first half of 2012, with the Republicans in the control of the US House, this total earnings growth stopped to a walk.

And a clearly eye-opening finding is how California's Largest Technology companies performed on the earnings front.

To show how key the Technology sector is to the State of California, the Total Pretax Income of the 86 Technology companies comprised nearly half, or 49%, of the Total Pretax Income of all of the 202 Largest California Corps.  And the total earnings of these 86 Largest California Technology companies more than doubled in 2011 over that of two years earlier in 2009.  Whoa!  But then that was much lower than the 147% total earnings growth in the same two years of California's 2 Big Oil Corps: Chevron and Occidental Petroleum.

These 86 California Largest Technology companies, included in these 202 Largest California Corps, generated Total Pretax Income of $135 bil in 2011, or an increase of 22% over 2010, when the Republicans were in control of the US House.  So what happened in 2010, when the US House was under Democratic Control?  Well, believe it or not, the Total Pretax Income of these 86 California Largest Technology companies increased by a massive 66% over 2009, or by three times the 22% earnings growth when the Republicans were in control of the US House in 2011. And in the first half of 2012, with the Republicans in control of the US House, the total earnings growth of these California Largest Technology companies declined even further, and did so markedly.

And when you back out Apple, the other 85 Largest California Technology companies had their Total Pretax Income growth decelerate much more sharply from a 69% earnings growth in 2010 over 2009, under Democratic control of the US House, to only 10% in 2011 over 2010, under Republican control of the US House.  And the Total Pretax Income of these 85 Largest California Technology companies was flat in the first half of 2012, as compared with the first half of 2011.


California's Largest Technology CEO's, all of their employees, and their stockholders have to be very disappointed with US Government action, or the lack thereof, in both 2011, and the first half of 2012, when the US House was under Republican control.  It would be clearly in all of their best economic interests if the US House turned to Democratic control, because Technology companies of all sizes will flourish from their present very tepid earnings growth, or even the lack thereof.

But it wasn't just California's Technology Corps which have experienced a massive earnings deterioration under Republican control of the US House. 

The 32 Largest Health Care Corps, included in the 202 Largest California Corps, generated Total Pretax Income growth of 23% in 2010 over 2009, when the US House was under Democrat control.  And what happened in 2011, when the US House switched to Republican control?  Well, the Total Pretax Income of these 32 Largest Health Care Corps actually declined by 2%.  Whew!

Likewise with the 11 Largest California Retail companies, whose total earnings growth in 2010 over 2009 was 13%.  However in 2011, their total earnings actually declined by 6% as compared with 2010.  Whew, again!

Likewise with the 35 Largest California Corps included in many Other Sectors, whose very robust total earnings growth in 2010 of 68% slipped to only a total earnings growth of 3% in 2011.  Whew, for a third time!

So why is it that these 202 Largest California Corps in all Sectors did so much better in 2010 than they did in both 2011 and in the 1Q 2012?  I think you need to look at the political situation.

In both years, the President was the same.....a Moderate Democrat.

However, the US House was under Very Conservative Republican control in 2011, but under Democratic control in 2010.

Also, the US Senate had a lower Democratic majority in 2011 than it did in 2010.

And the State Governors and State Legislatures, all across the country, were clearly more Very Conservative Republican in 2011 than they were in 2010.

So clearly, there was a substantial shift nationally from Moderate Democratic control in 2010 to Very Conservative Republican control in 2011.

How could this change in political control make such a huge difference in California State company earnings?

It is pretty clear to me that in 2010, a Moderate Democratic President, coupled most importantly with a US House in Democratic hands, but also having a US Senate in Democratic hands, and further with having more State Governors and State Legislatures in Moderate Democratic hands, did wonders for corporate earnings growth in 2010.  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.  And this very strong economic stimulus was in full throttle starting in the 4Q 2009, and did Corporations ever reap the benefit of this by generating exceptionally strong profits.

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 so many 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 an uncompromising Very Conservative 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 Very Conservative Republican control with the 2010 election, coupled with the US Senate Democratic majority rule being significantly reduced, and with many US States switching from Moderate Democratic Control to Very Conservative 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 nearly five 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, assuming that the cuts in business tax rates are focused primarily on the smaller businesses.

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 Very Conservative 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 Very Conservative 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 Moderate Democrat and the US House is in Democratic control, economic initiatives move forward, and they clearly did very robustly in 2009 and 2010.


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.  When corporate earnings absolutely tanked in late 2008 and in 2009, corporations were very quick to dramatically cut US full-time employees.  And to give a recent illustration, when Hewlett Packard announced down earnings in its April 2012 quarter, it also announced it will be cutting 27,000 jobs, or 8% of its workforce.  And I have seen so many large Restructuring Charges, where significant job cuts always result, made by so many Corporations in their 1Q 2012 Earnings Statements, and made in the same quarter where their earnings growth has fallen off the cliff.


This massive earnings growth deceleration in both these Largest and Smaller California Corps, particularly in the first half of 2012, where this strong earnings growth has clearly stopped to a walk, and which has also occurred all throughout the country, is shouting out that the US economy desperately needs an economic jolt.

I do think US companies, the US economy, and US job creation would all be helped immensely if the recalcitrant, uncompromising, Very Conservative Republican part of the US Congress would start working with the Obama Administration on much needed, bold, targeted like a laser, quick-hitting, highly effective, short-term economic stimulus, which is also wisely designed to get the maximum bang for the buck.

If the US Government remains in gridlock for a long time, I think the US unemployment rate will continue to hover around 8%, and for a very long time, and perhaps even move up some, somewhat similar to what happened in Japan.  That is why it is so critical that there be a complete makeover of the US Congress in the upcoming November 2012 election.  This is the only way the US economy will be great again.

And given the present very fragile state of the US economy, if Mitt Romney is the next President, along with both the US House and the US Senate being in Republican control, I am pretty certain that the country will see a US unemployment rate which will average in the very low double digit percentages during the last three years of his four-year Presidential term.  And the middle class will be substantially depleted.

Romney, and his US Congressional allies, want a huge, no-strings-attached reduction in the corporate income tax rate.  What that would do is to dramatically increase the After-tax Net Income of all corporations, and by a substantial amount.  And how many US jobs are created by just reducing the corporate income tax rate?  Absolutely none, directly.  And very few, if any, indirectly.  To argue that a reduction in the corporate income tax rate would either directly or indirectly create a lot of US jobs is being either intellectually dishonest, or having a complete lack of competence on economic issues.


=======================================

In deriving Pretax Income, I start with Pretax Income under Generally Accepted Accounting Principles (GAAP), and then exclude several clearly unusual very large items relative to Pretax Income, such as Long-term Asset Impairments, and Gains and Losses on both Debt Retirements and Asset Dispositions.

I use Pretax Income rather than After-tax Net Income, since so much of the change in effective income tax rates just happens due to financial engineering.

I excluded Corps in the Development Stage, as well as Corps not generating significant revenues.

And below here is the Pretax Income (PTI) or Pretax Loss of each of these 202 Largest California Corporations for each of the most recent three fiscal years, along with the related percentage changes in earnings.







US House US House Obama





Republican Democratic Bump





Control Control Two





PTI(L) PTI(L) Year





% % %





Change Change Change


PTI(L) PTI(L) PTI(L) 2011 2010 2011

California 2011 2010 2009 vs vs vs
California Largest Corps HQs mils $s mils $s mils $s 2010 2009 2009
Technology






Apple Cupertino 34,205 18,540 12,066 84% 54% 183%
Intel Santa Clara 17,781 16,045 8,401 11% 91% 112%
Oracle Redwood City 12,962 11,411 8,243 14% 38% 57%
Google Mountain View 12,826 10,796 8,381 19% 29% 53%
Hewlett Packard Palo Alto 11,080 11,267 9,657 -2% 17% 15%
Cisco Systems San Jose 7,825 9,415 7,693 -17% 22% 2%
Qualcomm San Diego 5,687 4,493 3,416 27% 32% 66%
Ebay San Jose 2,503 2,098 1,668 19% 26% 50%
Applied Materials Santa Clara 2,378 1,387 (486) 71% 385% 589%
Facebook Menlo Park 1,695 1,008 254 68% 297% 567%
Sandisk Milpitas 1,477 1,457 504 1% 189% 193%
Activision Blizzard Santa Monica 1,331 818 401 63% 104% 232%
KLA Tencor Milpitas 1,110 291 (156) 281% 287% 812%
Broadcom Irvine 1,048 1,169 209 -10% 459% 401%
Adobe Systems San Jose 1,035 943 702 10% 34% 47%
Agilent Technologies Santa Clara 1,032 560 7 84% 7900% 14643%
Intuit Mountain View 966 815 653 19% 25% 48%
Symantec Mountain View 948 764 809 24% -6% 17%
Altera San Jose 849 868 306 -2% 184% 177%
Yahoo! Sunnyvale 828 818 409 1% 100% 102%
Lam Research Fremont 801 430 (167) 86% 357% 580%
Western Digital Irvine 780 1,520 501 -49% 203% 56%
VMWare Palo Alto 738 416 223 77% 87% 231%
Linear Technology Milpitas 724 490 369 48% 33% 96%
NetApp Sunnyvale 712 794 447 -10% 78% 59%
Check Point Software Redwood City 683 564 446 21% 26% 53%
NVIDIA Santa Clara 663 271 11 145% 2364% 5927%
Maxim Integrated Products Sunnyvale 662 300 86 121% 249% 670%
Marvell Technology Group Santa Clara 619 910 343 -32% 165% 80%
Xilinx San Jose 597 771 422 -23% 83% 41%
Seagate Technology Cupertino 579 1,569 (494) -63% 418% 217%
Juniper Networks Sunnyvale 572 778 494 -26% 57% 16%
Flextronics International Silicon Valley 565 629 231 -10% 172% 145%
Dolby Laboratories San Francisco 441 447 351 -1% 27% 26%
National Semiconductor Santa Clara 403 269 114 50% 136% 254%
Ingram Micro Santa Ana 388 438 269 -11% 63% 44%
Autodesk San Rafael 363 272 106 33% 157% 242%
Netflix Los Gatos 360 268 192 34% 40% 88%
Atmel San Jose 346 228 (56) 52% 507% 718%
Novellus Systems San Jose 293 305 (69) -4% 542% 525%
Synnex Fremont 230 184 135 25% 36% 70%
Synopsys Mountain View 219 199 233 10% -15% -6%
Power One Camarillo 214 278 (9) -23% 3189% 2478%
Teledyne Technologies Thousand Oaks 212 174 166 22% 5% 28%
Advanced Micro Devices Sunnyvale 208 363 (1,003) -43% 136% 121%
Informatica Redwood City 167 121 90 38% 34% 86%
Trimble Navigation Sunnyvale 167 141 88 18% 60% 90%
Fairchild Semiconductor Intl San Jose 158 175 (63) -10% 378% 351%
International Rectifier El Segundo 158 29 (133) 445% 122% 219%
Polycom Pleasanton 157 82 68 91% 21% 131%
TIBCO Software Palo Alto 150 111 90 35% 23% 67%
Plantronics Santa Cruz 143 141 101 1% 40% 42%
j2 Global Los Angeles 137 111 110 23% 1% 25%
TTM Technologies Santa Ana 136 109 21 25% 419% 548%
QLogic Aliso Viejo 133 153 137 -13% 12% -3%
ValueClick Westlake Village 131 95 83 38% 14% 58%
Equinix Redwood City 131 60 109 118% -45% 20%
NETGEAR San Jose 124 91 33 36% 176% 276%
Cypress Semiconductor San Jose 121 94 (146) 29% 164% 183%
Cubic Corp San Diego 118 106 85 11% 25% 39%
Sanmina-SCI San Jose 116 103 (113) 13% 191% 203%
Quality Systems Irvine 116 94 76 23% 24% 53%
Cymer San Diego 108 121 17 -11% 612% 535%
Zynga San Francisco 104 127 (53) -18% 340% 296%
Atheros Communications Santa Clara 103 39 34 164% 15% 203%
LSI Corp Milpitas 94 38 (170) 147% 122% 155%
Brocade Communications Systems San Jose 92 124 27 -26% 359% 241%
Quest Software Aliso Viejo 86 115 105 -25% 10% -18%
Cadence Design Systems San Jose 79 (47) (150) 268% 69% 153%
Logitech Fremont 76 148 84 -49% 76% -10%
United Online Woodland Hills 75 90 118 -17% -24% -36%
Intersil Milpitas 68 120 60 -43% 100% 13%
Omnivision Technologies Santa Clara 64 129 10 -50% 1190% 540%
PMC Sierra Sunnyvale 52 105 51 -50% 106% 2%
JDS Uniphase Milpitas 46 (70) (136) 166% 49% 134%
Finisar Sunnyvale 45 101 1 -55% 10000% 4400%
Tessera Technologies San Jose 41 107 123 -62% -13% -67%
Electronic Arts Redwood City 18 (279) (706) 106% 60% 103%
Rambus Sunnyvale 6 85 106 -93% -20% -94%
Salesforce.com San Francisco (33) 104 142 -132% -27% -123%
Spansion Sunnyvale (35) (100) (139) 65% 28% 75%
FormFactor Livermore (68) (134) (142) 49% 6% 52%
Silver Spring Networks Redwood City (96) (145) (100) 34% -45% 4%
THQ Agoura Hills (119) (92) (12) -29% -667% -892%
Trident Microsystems Sunnyvale (143) (156) (51) 8% -206% -180%
SunPower San Jose (170) 94 44 -281% 114% -486%








Total all 85 Technology Except Apple 100,589 91,730 54,311 10% 69% 85%








Total all 86 Technology
134,794 110,270 66,377 22% 66% 103%








Big Oil






Chevron San Ramon 47,634 32,055 18,528 49% 73% 157%
Occidental Petroleum Los Angeles 10,459 7,634 5,038 37% 52% 108%








Total 2 Big Oil
58,093 39,689 23,566 46% 68% 147%








Finance Including REITs






Wells Fargo San Francisco 23,656 19,001 17,998 24% 6% 31%
Visa San Francisco 5,656 4,638 3,527 22% 31% 60%
Franklin Resources San Mateo 2,624 2,070 1,289 27% 61% 104%
Toyota Motor Credit Torrance 2,423 3,003 1,679 -19% 79% 44%
Charles Schwab San Francisco 1,392 1,231 1,276 13% -4% 9%
UnionBanCal San Francisco 1,081 793 (226) 36% 451% 578%
Public Storage Glendale 774 693 697 12% -1% 11%
International Lease Finance Corp Los Angeles 764 898 1,469 -15% -39% -48%
HCP Long Beach 645 376 278 72% 35% 132%
First Republic Bank San Francisco 555 470 606 18% -22% -8%
SVB Financial Group Santa Clara 402 198 50 103% 296% 704%
East West Bancorp Pasadena 383 233 (366) 64% 164% 205%
KKR Financial Holdings San Francisco 326 332 46 -2% 622% 609%
City National Beverly Hills 246 134 12 84% 1017% 1950%
Mercury General Los Angeles 245 182 572 35% -68% -57%
Cathay General Bancorp Los Angeles 172 12 (129) 1333% 109% 233%
Digital Realty Trust San Francisco 158 106 91 49% 16% 74%
Realty Income Escondido 153 122 120 25% 2% 28%
Alexandria Real Estate Equities Pasadena 143 124 124 15% 0% 15%
First American Financial Santa Ana 130 212 204 -39% 4% -36%
Anworth Mortgage Asset Santa Monica 123 110 130 12% -15% -5%
Westamerica Bancorporation San Rafael 121 131 134 -8% -2% -10%
CVB Financial Ontario 121 87 68 39% 28% 78%
PS Business Parks Glendale 100 96 91 4% 5% 10%
PacWest Bancorp Rancho Santa Fe 88 (109) (84) 181% -30% 205%
Pacific Capital Bancorp Santa Barbara 70 (150) (346) 147% 57% 120%
Hanmi Financial Los Angeles 29 (88) (153) 133% 42% 119%
Redwood Trust Mill Valley 25 111 35 -77% 217% -29%
KBS Real Estate Investment Trust Newport Beach (67) 5 (162) -1440% 103% 59%
MPG Office Trust Los Angeles (125) (101) (110) -24% 8% -14%
Prologis San Francisco (169) (309) (125) 45% -147% -35%








Total all 31 Finance
42,244 34,611 28,795 22% 20% 47%








Health Care






Amgen Thousand Oaks 5,013 5,435 5,204 -8% 4% -4%
Gilead Sciences Foster City 3,741 4,050 3,502 -8% 16% 7%
McKesson San Francisco 2,068 1,920 1,864 8% 3% 11%
Allergan Irvine 1,336 1,175 833 14% 41% 60%
Intuitive Surgical Sunnyvale 710 572 396 24% 44% 79%
Varian Medical Systems Palo Alto 589 533 475 11% 12% 24%
Herbalife Ltd Los Angeles 560 395 291 42% 36% 92%
Life Technologies Carlsbad 479 459 207 4% 122% 131%
CareFusion San Diego 457 414 338 10% 22% 35%
ResMed San Diego 304 261 202 16% 29% 50%
Edwards Lifesciences Irvine 284 268 217 6% 24% 31%
Bio-Rad Laboratories Hercules 236 220 186 7% 18% 27%
Illumina San Diego 219 190 143 15% 33% 53%
VCA Antech Los Angeles 197 192 220 3% -13% -10%
Gen-Probe San Diego 145 147 140 -1% 5% 4%
Health Net Woodland Hills 138 298 256 -54% 16% -46%
Molina Healthcare Long Beach 129 89 38 45% 134% 239%
Jazz Pharmaceuticals Silicon Valley 125 45 (7) 178% 743% 1886%
Coherent Santa Clara 124 58 (17) 114% 441% 829%
Questcor Pharmaceuticals Anaheim 114 54 42 111% 29% 171%
Thoratec Pleasanton 112 93 43 20% 116% 160%
Impax Laboratories Hayward 98 293 80 -67% 266% 23%
Align Technology San Jose 90 102 36 -12% 183% 150%
Exelixis South San Francisco 75 (100) (133) 175% 25% 156%
Rigel Pharmaceuticals South San Francisco (86) 38 (112) -326% 134% 23%
Amylin Pharmaceuticals San Diego (95) (152) (186) 38% 18% 49%
Arena Pharmaceuticals San Diego (98) (117) (156) 16% 25% 37%
Pacific Biosciences Menlo Park (109) (140) (88) 22% -59% -24%
Theravance South San Francisco (115) (84) (85) -37% 1% -35%
DJO Finance LLC Vista (116) (66) (80) -76% 18% -45%
Nektar Therapeutics San Francisco (132) (24) (103) -450% 77% -28%
Intermune Brisbane (155) 122 (95) -227% 228% -63%








Total all 32 Health Care
16,437 16,740 13,651 -2% 23% 20%








Leisure & Entertainment






Walt Disney Burbank 8,043 6,627 5,658 21% 17% 42%
DIRECTV El Segundo 3,984 3,514 2,325 13% 51% 71%
DreamWorks Animation Glendale 129 187 203 -31% -8% -36%
Live Nation Entertainment Beverly Hills (97) (168) (115) 42% -46% 16%
TiVo Alviso (128) (84) (24) -52% -250% -433%








Total all 5 Leisure & Entertainment
11,931 10,076 8,047 18% 25% 48%








Retail






GAP San Francisco 1,369 1,982 1,816 -31% 9% -25%
Ross Stores Pleasanton 1,053 897 719 17% 25% 46%
Safeway Pleasanton 882 881 1,021 0% -14% -14%
Guess Los Angeles 419 421 362 0% 16% 16%
Williams Sonoma San Francisco 382 323 120 18% 169% 218%
Copart Fairfield 264 239 228 10% 5% 16%
Cheesecake Factory Calabasas Hills 129 111 78 16% 42% 65%
Jack in the Box San Diego 126 106 211 19% -50% -40%
DineEquity Glendale 120 95 (9) 26% 1156% 1433%
99 Cents Only Stores City of Commerce 118 94 24 26% 292% 392%
Guitar Center Westlake Village (105) (86) (91) -22% 5% -15%








Total all 11 Retail
4,757 5,063 4,479 -6% 13% 6%








Other Sectors






Mattel El Segundo 971 847 660 15% 28% 47%
Clorox Oakland 821 805 709 2% 14% 16%
URS San Francisco 580 514 454 13% 13% 28%
Jacobs Engineering Group Pasadena 517 479 624 8% -23% -17%
Reliance Steel & Aluminum Los Angeles 512 297 196 72% 52% 161%
Monster Beverage Corona 457 349 336 31% 4% 36%
CBRE Group Los Angeles 430 290 28 48% 936% 1436%
Aecom Technology Los Angeles 384 341 278 13% 23% 38%
Deckers Outdoor Goleta 285 250 183 14% 37% 56%
Bridgepoint Education San Diego 277 218 82 27% 166% 238%
Robert Half International Menlo Park 250 115 67 117% 72% 273%
Avery Dennison Pasadena 243 244 (47) 0% 619% 617%
Del Monte Corp San Francisco 215 458 418 -53% 10% -49%
Cooper Companies Pleasanton 209 152 115 38% 32% 82%
Levi Strauss San Francisco 203 252 190 -19% 33% 7%
Tetra Tech Pasadena 140 123 119 14% 3% 18%
Tutor Perini Sylmar 137 159 205 -14% -22% -33%
Wesco Aircraft Valencia 128 118 96 8% 23% 33%
UTi Worldwide Long Beach 120 108 66 11% 64% 82%
Ceradyne Costa Mesa 119 29 8 310% 263% 1388%
Corinthian Colleges Santa Ana 117 241 117 -51% 106% 0%
Yasheng Group Redwood City 114 97 77 18% 26% 48%
Breitburn Energy Partners Los Angeles 112 35 (109) 220% 132% 203%
Granite Construction Watsonville 89 (12) 139 842% -109% -36%
Central Garden & Pet Walnut Creek 48 88 104 -45% -15% -54%
Century Aluminum Monterey 22 68 (150) -68% 145% 115%
Gymboree San Francisco (10) 55 165 -118% -67% -106%
Standard Pacific Irvine (16) 18 (102) -189% 118% 84%
Shea Homes Limited Partnership Walnut (22) (59) (501) 63% 88% 96%
Ryland Group Westlake Village (31) (61) (251) 49% 76% 88%
Skechers USA Manhattan Beach (97) 197 71 -149% 177% -237%
Amyris Emeryville (179) (83) (65) -116% -28% -175%
KB Home Los Angeles (181) (76) (311) -138% 76% 42%
Tesla Motors Palo Alto (254) (154) (56) -65% -175% -354%
Leap Wireless San Diego (254) (206) (171) -23% -20% -49%








Total all 35 in Other Sectors
6,456 6,296 3,744 3% 68% 72%








Grand Total all 202
274,712 222,745 148,659 23% 50% 85%