US Big Other Health Care Corps 2012 Annual Earnings Up 5.2% and EPS Up a Much Higher 10.8%

Other than the 6 US Big Pharma Corps, which I covered in an earlier post, I found 18 US Big Other Health Care Corps filing with the SEC which generated Non-GAAP Adjusted After-tax Net Income or Net Loss of over $1 bil each in either annual 2012 or annual 2011.  I excluded from these 18 Express Scripts since it had a major acquisition in the most recent year which was financed with its common stock and thus a comparison of its Earnings Growth and EPS Growth with the prior year is not very useful.

Non-GAAP Adjusted After-tax Net Income, which is generally used by the investment community to value common stocks, 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 GAAP Net Income.

How did these 18 US Big Other Health Care Corps do on the earnings front in 2012?  Pretty well.

The Total Non-GAAP Adjusted After-tax Net Income of these 18 US Big Other Health Care Corps was $38.5 bil in annual 2012, up a healthy 5.2% over 2011.

And on an Earnings Per Share basis, the total growth was a substantially more robust 10.8%, which was a company-earnings-weighted 5.6%, or 108%, higher than the 5.2% total earnings growth.

So, what's with this substantial add-on 5.6% earnings growth on an EPS basis, as compared with the 5.2% growth on just an earnings growth basis.  After all, EPS and EPS growth are what drive common stock prices.

It's the massive common stock buyback programs that nearly all of the US Big Other Health Care Corps Corps have.  The US Fed has facilitated this with its extremely low interest rates, which makes these common stock buyback programs incredibly lucrative for all large US Corps, and the US Big Other Health Care Corps Corps have clearly taken this common stock buyback strategy to a completely different level.

Yeah, that's right, more than half of the total earnings growth of these 18 fine US Big Other Health Care Corps is coming from their massive stock buyback programs.   

But the problem with these massive stock buyback programs is that they only benefit the very wealthy and they further expand the huge wealth gap between the very wealthy and everyone else, including small businesses, who are not able to take economic advantage of it.

And these massive common stock buyback programs have been one of the major reasons for the US stock market advancing so high as compared what has been happening with the US general economy and with US real GDP growth.

Why?  Well, by increasing annual earnings growth from 5.2% to 10.8% on an annual EPS growth basis, the intrinsic value of the common stock goes up dramatically, thus causing an artificially high stock market bubble.  The US stock market is not increasing so dramatically because the US economy is growing at the same pace.  Instead, the US stock market is growing so dramatically because of the artificially high EPS growth, caused by the massive common stock buybacks, which have been fueled by US Fed action on interest rates and by clear lack of US Congressional oversight.  And this artificially high US stock market predominantly benefits economically only the top 1%, leaving the remaining 99% even further behind.

And instead of legislating to more fairly deal with this, the US Congress just sits there and twittles its thumbs.  

Below here is the Non-GAAP Adjusted After-tax Net Income for both annual 2012 and 2011 for each of these 18 US Big Other Health Care Corps:

							EPS
				Non-GAAP	Non-GAAP		Growth
		Annual	Annual	Adjusted	Adjusted		Over
		2012	2011	Net	Net	Adjusted	Earnings
		Non-GAAP	Non-GAAP	Income	Income	EPS	Growth
		Adjusted	Adjusted	Increase	Increase	Increase	Positive
		Net	Net	(Decrease)	(Decrease)	(Decrease)	%
Company	FYE	Income	Income	Amount	%	%	Spread
		mils of $s	mils of $s	mils of $s
Other Health Care
Amgen	Dec	5,119	4,858	261	5.4%	22.1%	16.7%
CVS Caremark	Dec	4,397	3,766	631	16.8%	22.5%	5.7%
Medtronic	Apr	3,666	3,643	23	0.6%	2.7%	2.1%
Gilead Sciences	Dec	3,084	3,039	45	1.5%	1.0%	-0.5%
Walgreens	Aug	2,565	2,710	(145)	-5.4%	0.0%	5.4%
Baxter	Dec	2,516	2,471	45	1.8%	5.1%	3.3%
Celgene	Dec	2,162	1,753	409	23.3%	29.6%	6.3%
Covidien Ltd	Sep	2,068	1,974	94	4.8%	7.3%	2.5%
HCA	Dec	1,603	1,413	190	13.4%	22.5%	9.1%
McKesson	Mar	1,602	1,396	206	14.8%	20.2%	5.4%
Biogen IDEC	Dec	1,567	1,446	121	8.4%	10.7%	2.3%
Stryker	Dec	1,560	1,448	112	7.7%	9.4%	1.7%
Allergan	Dec	1,272	1,132	140	12.4%	13.4%	1.0%
Becton Dickinson	Sep	1,123	1,206	(83)	-6.9%	0.8%	7.7%
Cardinal Health	Jun	1,119	988	131	13.3%	14.6%	1.3%
St Jude Medical	Dec	1,095	1,074	21	2.0%	6.1%	4.1%
Forest Labs	Mar	1,063	1,290	(227)	-17.6%	-12.4%	5.2%
Boston Scientific	Dec	933	1,018	(85)	-8.3%	-1.5%	6.8%
Total all 18 Other Health Care		38,514	36,625	1,889	5.2%	10.8%	5.6%