Saturday, April 27, 2013

US Big Health Care Corps 1Q 2013 GAAP Pretax Income Down 7%.....US Congress Responds By Fleeing DC

I found 23 US Health Care Corps, which have filed their calendar 1Q 2013 earnings with the SEC by April 26, 2013, and which had Pretax Income of more than $200 mil in either the 1Q 2013 or the 1Q 2012.

These 23 US Health Care Corps generated US Generally Accepted Accepted Accounting Principles (GAAP) Total Pretax Income in the 1Q 2013 of $19,998 mil, which was down 7.3% from the $21,574 mil earned in the 1Q 2012.

On the other hand, these same 23 US Health Care Corps generated GAAP Total After-tax Net Income which was down by a substantially lower 1.8% in the 1Q 2013 as compared with the 1Q 2012.

So, what's up with the 5.5% positive earnings spread from the down 7.3% Pretax Income in the 1Q 2013 to the down 1.8% After-tax Net Income in the 1Q 2013?

Well, it's all about the effective income tax rate and financial engineering.

In total, these 23 US Health Care Corps slashed their effective income tax rates on a book basis from 25.0% of Pretax Income in the 1Q 2012 to 20.6% in the 1Q 2013.

Having the key US Health Care Sector generating a total decline of 7.3% in Pretax earnings in the 1Q 2013 is just horrible for the US economy.  And it's also terrible for US job creation in this key US sector.  The key question is that, given these horrible operating results, just how much shedding of US jobs will there be in this key US Health Care Sector.

So, how does the US Congress react to this horrible 1Q 2013 quarter for the key US Health Care Sector?  Well, they flee Washington DC.

It is pretty clear that substantial fiscal stimulus to the US economy has been needed for quite some time.  So how has the US Congress responded?  Now granted the Obama Administration should have been bolder and more creative, but the US Congress has rejected nearly every recommendation made by the Obama Administration to spur the US economy and US job creation.

And so what has the US Congress done instead?  They passed an immediate severe austerity Sequester which substantially harms US economic growth, US job creation, the profits of these US Health Care Corps, of US Manufacturers, of US Technology Corps, and of the huge Dow Industrial Corps.

And what is the intellectual foundation that the US Congress used to pass this immediate severe austerity Sequester, which results in a substantial reduction in US jobs and US economic growth?  An economic study by two Harvard professors which concludes that when the US debt level is 90% of US GDP, that as if by magic, GDP growth drops dramatically.

And now that it has been proven that this economic study is clearly erroneous, how does the US Congress react to the complete collapse of the intellectual foundation of their immediate severe austerity Sequester initiative?  By ignoring its collapse.

Below here is the GAAP Pretax Income, GAAP Income Tax Expense, and GAAP Effective Income Tax Rates on a book basis for both the calendar 1Q 2013 as well as the 1Q 2012 for each of these 23 US Health Care Corps:





1Q 2013


1Q 2012

GAAP


1Q 2013 GAAP

1Q 2012 GAAP
GAAP Combined

1Q 2013 GAAP Effective
1Q 2012 GAAP Effective
Pretax Net

GAAP Income Income
GAAP Income Income
Income Income

Pretax Tax Tax
Pretax Tax Tax
Increase Increase

Income Expense Rate
Income Expense Rate
(Decrease) (Decrease)

mil $s mil $s

mil $s mil $s

mil $s mil $s
Health Care Corps




















Johnson & Johnson 4,261 764 17.9%
5,045 1,135 22.5%
(784) (413)
United Health Group 1,961 721 36.8%
2,169 781 36.0%
(208) (148)
Eli Lilly 1,951 403 20.7%
1,335 324 24.3%
616 537
Amgen 1,343 (91) -6.8%
1,366 182 13.3%
(23) 250
WellPoint 1,287 402 31.2%
1,310 453 34.6%
(23) 28
AbbVie 1,239 271 21.9%
1,006 123 12.2%
233 85
Walgreen's 1,192 436 36.6%
1,088 405 37.2%
104 73
Medtronic 1,155 167 14.5%
1,053 208 19.8%
102 143
Baxter 693 141 20.3%
732 144 19.7%
(39) (36)
Bristol Myers Sqlulibb 674 51 7.6%
2,027 545 26.9%
(1,353) (859)
Covidien Ltd 565 124 21.9%
568 77 13.6%
(3) (50)
Abbott Labs 554 10 1.8%
463 112 24.2%
91 193
Biogen IDEC 496 66 13.3%
385 82 21.3%
111 127
Celgene 448 64 14.3%
474 73 15.4%
(26) (17)
Stryker 375 71 18.9%
468 118 25.2%
(93) (46)
AmeriSource Bergen 331 127 38.4%
354 135 38.1%
(23) (15)
Zimmer Holdings 284 66 23.2%
281 72 25.6%
3 9
St Jude Medical 260 38 14.6%
279 67 24.0%
(19) 10
Intuitive Surgical 256 67 26.2%
197 54 27.4%
59 46
Lab Corp of America 241 94 39.0%
270 108 40.0%
(29) (15)
Universal Health Services 204 74 36.3%
222 80 36.0%
(18) (12)
Quest Diagnostics 197 73 37.1%
268 103 38.4%
(71) (41)
Forest Labs 31 (15) -48.4%
214 21 9.8%
(183) (147)



 


 


Total all 23 Health Care 19,998 4,124 20.6%
21,574 5,402 25.0%
(1,576) (298)











Total Pretax Income % Decrease -7.31%



















Total After-tax Combined Net Income % Decrease -1.84%



















= Positive Income Tax Earnings Spread 5.46%