Friday, February 1, 2013

US Broad-Based Manufacturing Corp Earnings Crushed Again in the 4Q 2012 By Ineffective US Congress

I found 29 US Broad-based Manufacturing Corps, which file with the SEC, which have already reported their calendar December 2012 quarterly earnings through the end of today February 1, 2013, and which reported Adjusted After-tax Net Income or Net Loss of at least $100 mil in either the 4Q 2012 or in the 4Q 2011.

These 29 US Broad-based Manufacturing Corps generated Total Adjusted After-tax Net Income in the 4Q 2012 of $11,784 mil, down 3% from the $12,149 mil of like earnings generated in the 4Q 2011.  

This Adjusted After-tax Net Income above was used when this amount was disclosed in the company's earnings release, and it excludes Special, Unusual Items which are significant in amount relative to Reported Net Income. 

This 3% 4Q 2012 earnings decline was also pretty consistent with the earnings results of the largest US Manufacturing Corps in the first 9 months of 2012.

The stick out winners here were Ford, which generated 4Q 2012 Earnings growth of $444 mil, or 56% over the 4Q 2011; Whirlpool, which registered 4Q 2012 Earnings growth of $159 mil, or an off-the-charts 636% growth over the 4Q 2011; and Chrysler, which posted 4Q 2012 Earnings growth of $153 mil, or 68% over the 4Q 2011.

It's pretty clear to me that a non-action US Congress was the main driver of these weak earnings, not just in the key Broad-based Manufacturing sector, but also in the Technology sector, which I covered in an earlier post.

The Republicans in the US Congress stubbornly only want to reduce costs to resolve the remaining portion of the US Debt Grand Bargain.  The President and the Democrats in the US Congress want a fair balance between US Government Cost Cuts and additional US Tax Revenues, including the closing of some Corporate Tax Loopholes.

A substantial majority of US Citizens agree with the President on a fair balance of Cost Cuts and Additional Tax Revenues approach.

The Republicans in the US Congress, being protectorates of US Big Corporations, do not want them to have to pay a dime of Additional Tax Revenues, despite the fact that their effective tax rate they are paying now is extremely low, the result of both a massive number and a massive amount of Tax Loopholes the US Congress has bestowed on them.

Instead of moving the country's economy forward with wisely-designed fiscal stimulus, which is desperately needed in this continuing weak US economy, these mean-spirited Republicans in the US Congress are instead focusing all of their efforts solely on reducing the US Debt, and by doing so only with Cost Cuts period, including massive cuts to both Medicare Benefits and Social Security Benefits.
  
There is something seriously wrong with the US economy when the very largest Big 8 US Financial Corps generate Total Earnings growth of 56% and the next 13 largest US Banks generate Total Earnings growth of 40%, both in the most recent 4Q 2012, while at the same time, these above 29 of the largest Corps in the key Broad-based Manufacturing sector had their 4Q 2012 Total Earnings decline by 3%.  And the same story happened in the key US Technology sector, which also experienced very weak earnings in the 4Q 2012.

It's pretty clear that the US Congress needs to provide some robust fiscal stimulus to the Broad-based Manufacturing and Technology sectors that especially benefits the smaller manufacturing and smaller technology Corps. 

And both the Manufacturing and Technology sectors would benefit greatly if at least one, or perhaps even two people, with an exceptionally keen business intellect like Sheryl Sandberg ends up in the second-term Obama Cabinet.  That's the only critical ingredient which is missing from the very talented Obama Cabinet.  With this addition, I think there should be an exceptional, continuing, broad-based US economic uplift which fairly benefits all US citizens in the second Obama Administration term.

Below here are the Adjusted After-tax Net Income of each of these 29 Broad-based Manufacturing Corps in the 4Q 2012 and in the 4Q 2011:
      

4Q 2012 4Q 2011


Non-GAAP Non-GAAP


Adjusted Adjusted Increase Increase
Net Net (Decrease) (Decrease)
Income Income Amount %

mils of $s mils of $s mils of $s
Broad-Based Manufacturing Sorted by Sub-Sector

Motor Vehicle and Parts


Ford Motor 1,241 797 444 56%
Chrysler 378 225 153 68%
Paccar 254 328 (74) -23%
Navistar (Pretax Adjusted Income) (314) 275 (589) -214%
Total all 4 1,559 1,625 (66) -4%



Conglomerates Manufacturing


United Technologies 1,176 1,269 (93) -7%
3M 1,004 974 30 3%
Honeywell 873 827 46 6%
Johnson Controls 384 459 (75) -16%
Ingersoll-Rand 230 240 (10) -4%
Total all 5 3,667 3,769 (102) -3%





Farm & Construction Equipment


Caterpillar 980 1,562 (582) -37%
Deere 689 672 17 3%
CNH Global NV 230 189 41 22%
Joy Global 208 194 14 7%
Dover 196 197 (1) -1%
Total all 5 2,303 2,814 (511) -18%


Miscellaneous Large Manufacturers


Danaher 630 564 66 12%
Corning 498 513 (15) -3%
Illinois Tool Works 412 427 (15) -4%
Total all 3 1,540 1,504 36 2%
Aircraft and Parts



Boeing 1,116 1,050 66 6%





Electronic/Electrical Equipment & Products

Whirlpool 184 25 159 636%
Rockwell Automation 174 189 (15) -8%
Amphenol 154 121 33 27%
Total all 3 512 335 177 53%





Paints



PPG Industries 238 216 22 10%





Metals



Parker Hannifin 181 242 (61) -25%
Nucor 137 137 0 0%
Timken 75 109 (34) -31%
US Steel (59) (149) 90 -60%
Total all 4 334 339 (5) -1%


Miscellaneous Manufacturing


Stanley Black & Decker 225 203 22 11%
Pitney Bowes 170 192 (22) -11%
Ametek 120 102 18 18%
Total all 3 515 497 18 4%


Grand Total all 29 11,784 12,149 (365) -3%