Sunday, March 10, 2013

US Big TV Leisure and Entertainment Corps 2012 Annual Earnings Up 8.6% and EPS Up a Much Higher 14.9%

I found 12 US Big TV Leisure and Entertainment 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.

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 12 Big TV Leisure and Entertainment Corps do?  Very well.

The Total Non-GAAP Adjusted After-tax Net Income of these 12 US TV Leisure and Entertainment Corps was $31.6 bil in annual 2012, up a healthy 8.6% over 2011.

And on an Earnings Per Share basis, the total growth was a substantially more robust 14.9%, which was a company-earnings-weighted 6.3%, or 73%, higher than the 8.6% total earnings growth.

When you think about it, it is just amazing that these 12 Big TV Leisure and Entertainment Corps generated 14.9% EPS growth in 2012, a Presidential election year where the US Congress was doing everything possible to substantially slow down the US economy, hoping that it would result in President Obama being defeated in the election.

Just think what the US economy and these Big Corps' earnings will do if the US Congress would start working with, instead of against, the Obama Administration.

So, what's with this substantial add-on 6.3% earnings growth on an EPS basis, as compared with the 8.6% 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 TV Leisure and Entertainment 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 Big TV Leisure and Entertainment Corps have clearly taken this common stock buyback strategy to a completely different level.   

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 8.6% to 14.9% 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 only benefits economically 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 12 US Big TV Leisure and Entertainment Corps:



Annual Annual Adjusted Adjusted

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

TV Leisure and Entertainment

Walt Disney Sep 5,682 4,807 875 18.2% 24.2% 6.0%
Comcast Dec 5,232 4,377 855 19.5% 22.2% 2.7%
News Corp Jun 3,521 3,109 412 13.3% 19.5% 6.2%
Time Warner Dec 3,203 3,075 128 4.2% 13.5% 9.3%
DirecTV Dec 2,949 2,609 340 13.0% 32.0% 19.0%
Viacom Sep 2,264 2,247 17 0.8% 11.4% 10.6%
Time Warner Cable Dec 1,797 1,573 224 14.2% 22.6% 8.4%
Las Vegas Sands Dec 1,768 1,644 124 7.5% 5.9% -1.6%
CBS Dec 1,678 1,417 261 18.4% 22.6% 4.2%
Carnival Nov 1,471 1,912 (441) -23.1% -22.3% 0.8%
DISH Network* Dec 1,111 1,310 (199) -15.2% -16.4% -1.2%
Discovery Communications Dec 954 1,033 (79) -7.6% -1.6% 6.0%

Total all 12
31,630 29,113 2,517 8.6% 14.9% 6.3%

* Excludes Large Litigation Expense and Gains, net of 35% income tax rate.