Thursday, January 26, 2017

The 128 US Companies With Market Caps Above $10 Bil, With December Quarter Ends And Which Have Released Their December 2016 Quarter Earnings By Thursday, January 26, 2017 Generated Calendar 4Q 2016 Total US GAAP Earnings of $107.130 Bil, Up a Robust 19.2% From Their Total US GAAP Earnings of $89.894 Bil in the Calendar 4Q 2015 ..... It's Good To See the Largest, Early 4Q Earnings Reporters Register Such Robust Total Earnings Growth in the Final Quarter of the Obama Administration

From a review of the very fine Google Finance Website, the excellent Yahoo Earnings Calendar Website and of company financial statements in the US SEC website, I found the 128 Companies headquartered in the US with Stock Market Capitalizations two months ago of more than $10 Bil, which have December Period Ends in the Calendar 4Q and which have filed their Calendar 4Q 2016 Financial Statements with the SEC by Thursday, January 26, 2017.  Traditional Predominately Regulated Utilities were excluded.

To better understand the trend of the below 4Q Earnings amounts, I think it might be helpful to address the 4Q Income Tax Expense (Benefit) of three of them.

First, the second on the below list ..... eBay.  It's 4Q 2016 Earnings of $5.9 Bil were bolstered by a non-cash $4.6 Bil income tax benefit related to a legal structure realignment, primarily impacting its international entities. 

Second, the third on the below list ..... Alphabet.

For the 9 Months Ended Sept 30, 2016, Alphabet generated Pretax Income of $17.293 Bil, up 20% from $14.451 Bil in the 9 Months Ended Sept 30, 2015.  Its After Tax Net Income for the 9 Months Ended September 30, 2016 was $14.145 Bil, up 24% from the $11.425 Bil in the 9 Months Ended Sept 30, 2015.  Its Book Effective Income Tax Rate for the 9 Months Ended September 30, 2016 was 18.2% vs. a higher 20.9% for the 9 Months Ended September 30, 2015.

So, what happened in the 4Q 2016?  Well, Alphabet used a higher book effective tax rate of 22.2% for the 4Q 2016, as compared with reporting a substantially lower book effective tax rate of only 5.3% in the 4Q 2015.  This resulted in a strange result with Alphabet's After Tax Net Income for the 4Q 2016 increasing by only 8% from the 4Q 2015, whereas its Pretax Income for the 4Q 2016 increased by an exceptional 32% from the 4Q 2015.

So, what's with the huge variances in Alphabet's book effective tax rates?  I think a significant part of it relates to the US Research Tax Credit, which is large and increasing for Alphabet to the tune of $407 Mil in 2015, which was up 28% from $307 Mil in 2014.

The US PATH Act which made the Research Tax Credit permanent in the very latter part of the 4Q 2015 resulted in large part for Alphabet's 4Q 2015 book effective tax rate being extremely low ..... 5.3% ..... since 4Qs of Research Tax Credit had to be reflected all in the 4Q 2015.  On the other hand, since this Research Tax Credit was Permanent in all of 2016, the Research Tax Credit lowered the book effective tax rate in each of the four quarters of 2016.  Thus, the 4Q 2016 had only roughly one quarter of the annual Research Tax Credit included in earnings, whereas the 4Q 2015 had four quarters of the annual Research Tax Credit included in earnings.

So, what's the most relevant measure for how Alphabet performed in the 4Q 2016?  It's clearly not its After Tax Net Income trend, which was very significanty distorted by the timing of when the US PATH ACT was made permanent and thus resulted in the Research Tax Credit being inconsistently handled in quarterly earnings.

From my perspective, the most relevant measure for how Alphabet performed in the 4Q 2016 was clearly the 32% increase in Pretax Income in the 4Q 2016 over the 4Q 2015, especially since it's clearly a substantial acceleration of true earnings growth from the 20% Pretax Income growth for the 9 Months ended September 30, 2016 over the 9 Months ended September 30, 2015.

Third, the last one on the below list ..... Oil & Gas Company Hess Corp.  For the 4Q 2016, it had a Pretax Loss of $1.709 Bil, a bit better than the Pretax Loss of $2.283 Bil in the 4Q 2015.  However, its Bottom Line Net Loss was a substantially higher $4.898 Bil in the 4Q 2016 due to a $3.749 Bil Non-cash Accounting Charge related to its assessment of the future realization of its Deferred Tax Assets.

Below here are the Total Reported US GAAP Earnings (Losses) From Continuing Operations for the Quarters Ended December 2016 and 2015 for each of these 128 large US Companies.




Calendar Calendar







4Q 4Q







2016 2015




Calendar US GAAP US GAAP
Companies With Market Caps Above $10 Bil, With 

Most
4Q Net Net
Dec 2016 Quarter Ends And Which Have Released City State Recent
Month Income Income Better Better
Their Dec 2016 Quarter Earnings By Jan 26, 2017 HQs HQs FYE
End (Loss) (Loss) (Worse) (Worse)





 $ mils  $ mils  $ mils %










JPMorgan Chase New York NY Dec16
Dec         6,727         5,434         1,293 24%
eBay Inc San Jose CA Dec16
Dec         5,948            523         5,425 1037%
Alphabet (Google) Mountain View CA Dec16
Dec         5,333         4,923            410 8%
Wells Fargo San Francisco CA Dec16
Dec         5,304         5,623           (319) -6%
Microsoft Redmond WA Jun16
Dec         5,200         5,018            182 4%
Banc of America Charlotte NC Dec16
Dec         4,696         3,284         1,412 43%
Verizon Communications New York NY Dec16
Dec         4,600         5,513           (913) -17%
IBM Armonk NY Dec16
Dec         4,505         4,460              45 1%
Johnson & Johnson New Brunswick NJ Dec16
Dec         3,814         3,215            599 19%
General Electric Boston MA Dec16
Dec         3,659         2,645         1,014 38%
Citigroup New York NY Dec16
Dec         3,591         3,405            186 5%
Intel Santa Clara CA Dec16
Dec         3,562         3,613             (51) -1%
Procter & Gamble Cincinnati OH Jun16
Dec         2,561         2,905           (344) -12%
AT&T Dallas TX Dec16
Dec         2,515         4,086        (1,571) -38%
Comcast Philadelphia PA Dec16
Dec         2,417         2,056            361 18%
Goldman Sachs New York NY Dec16
Dec         2,347            765         1,582 207%
UnitedHealth Group Minnetonka MN Dec16
Dec         1,928         1,252            676 54%
Morgan Stanley New York NY Dec16
Dec         1,680            943            737 78%
Boeing Seattle WA Dec16
Dec         1,631         1,026            605 59%
Corning Corning NY Dec16
Dec         1,572            224         1,348 602%
US Bancorp Minneapolis MN Dec16
Dec         1,491         1,489                2 0%
McDonald's Oak Brook IL Dec16
Dec         1,193         1,206             (13) -1%
3M St Paul MN Dec16
Dec         1,156         1,039            117 11%
Union Pacific Omaha NE Dec16
Dec         1,144         1,117              27 2%
United Technologies Farmington CT Dec16
Dec         1,124           (177)         1,301 735%
PNC Financial Services Group Pittsburgh PA Dec16
Dec         1,047         1,022              25 2%
Texas Instruments Dallas TX Dec16
Dec         1,047            836            211 25%
Lockeed Martin Bethesda MD Dec16
Dec            959            817            142 17%
Travelers Saint Paul MN Dec16
Dec            943            866              77 9%
Bristol-Myers Squibb New York NY Dec16
Dec            898           (188)         1,086 578%
Bank New York Mellon New York NY Dec16
Dec            872            696            176 25%
BlackRock New York NY Dec16
Dec            851            869             (18) -2%
American Express New York NY Dec16
Dec            825            899             (74) -8%
Capital One Financial McLean VA Dec16
Dec            793            908           (115) -13%
The Blackstone Group LP New York NY Dec16
Dec            770            395            375 95%
Abbott Laboratories Abbott Park IL Dec16
Dec            765            695              70 10%
Starbucks Seattle WA Sep16
Dec            752            688              64 9%
Qualcomm San Diego CA Sep16
Dec            681         1,496           (815) -54%
McKesson San Francisco CA Mar16
Dec            649            642                7 1%
Biogen Cambridge MA Dec16
Dec            648            829           (181) -22%
BB&T Corp Winston Salem NC Dec16
Dec            643            542            101 19%
Delta Airlines Atlanta GA Dec16
Dec            622            980           (358) -37%
Las Vegas Sands Las Vegas NV Dec16
Dec            607            575              32 6%
State Street Corp Boston MA Dec16
Dec            593            577              16 3%
Synchrony Financial Stamford CT Dec16
Dec            576            547              29 5%
Discover Financial Services Riverwoods IL Dec16
Dec            563            500              63 13%
Raytheon Waltham MA Dec16
Dec            541            554             (13) -2%
Northrop Grumman Falls Church VA Dec16
Dec            525            459              66 14%
Charles Schwab San Francisco CA Dec16
Dec            522            416            106 25%
Southwest Airlines Dallas TX Dec16
Dec            522            536             (14) -3%
Kimberly-Clark Dallas TX Dec16
Dec            518            344            174 51%
Stryker Kalamazoo MI Dec16
Dec            510            522             (12) -2%
Illinois Tool Works Glenview IL Dec16
Dec            507            450              57 13%
SunTrust Banks Atlanta GA Dec16
Dec            467            487             (20) -4%
Prologis San Francisco CA Dec16
Dec            467            127            340 268%
CSX Corp Jacksonville FL Dec16
Dec            458            466               (8) -2%
VMware Palo Alto CA Dec16
Dec            441            373              68 18%
Celgene Summit NJ Dec16
Dec            429            561           (132) -24%
Praxair Danbury CT Dec16
Dec            419            431             (12) -3%
Norfolk Southern Norfolk VA Dec16
Dec            416            361              55 15%
TE Connectivity Ltd Berwyn  PA  Sep16
Dec            406            324              82 25%
United Continental Chicago IL Dec16
Dec            397            823           (426) -52%
Fifth Third Bancorp Cincinnati OH Dec16
Dec            395            657           (262) -40%
PayPal Holdings San Jose CA Dec16
Dec            390            367              23 6%
Progressive Corp Mayfield Village OH Dec16
Dec            383            330              53 16%
T. Rowe Price Group Baltimore MD Dec16
Dec            367            303              64 21%
Lam Research Fremont CA Jun16
Dec            333            223            110 49%
M&T Bank Buffalo NY Dec16
Dec            331            271              60 22%
Seagate Technology Cupertino CA Jun16
Dec            297            165            132 80%
Regions Financial Birmingham AL Dec16
Dec            294            288                6 2%
Citizens Financial Group Providence RI Dec16
Dec            282            221              61 28%
Northern Trust Chicago IL Dec16
Dec            267            239              28 12%
Royal Caribbean Cruises Miami FL Dec16
Dec            261            207              54 26%
Skyworks Solutions Woburn MA Sep16
Dec            258            355             (97) -27%
Stanley Black & Decker New Britain CT Dec16
Dec            256            267             (11) -4%
Dupont Wilmington DE Dec16
Dec            252           (231)            483 209%
Amphenol Wallingford CT Dec16
Dec            238            203              35 17%
KLA-Tencor Milpitas CA Jun16
Dec            238            152              86 57%
Western Digital Irvine CA Jun16
Dec            235            251             (16) -6%
KeyCorp Cleveland OH Dec16
Dec            232            233               (1) 0%
Check Point Software San Carlos CA Dec16
Dec            222            195              27 14%
Invesco Ltd Atlanta GA Dec16
Dec            218            195              23 12%
TD Ameritrade Omaha NE Sep16
Dec            216            212                4 2%
Kinder Morgan Inc Houston TX Dec16
Dec            215           (736)            951 129%
Rockwell Automation Milwaukee WI Sep16
Dec            215            186              29 16%
Textron Providence RI Dec16
Dec            215            225             (10) -4%
Huntington Bancshares Columbus OH Dec16
Dec            212            178              34 19%
CA Inc New York NY Mar16
Dec            208            219             (11) -5%
D.R. Horton Fort Worth TX Sep16
Dec            207            158              49 31%
Intuitive Surgical Sunnyvale CA Dec16
Dec            204            190              14 7%
Freeport-McMoRan Phoenix AZ Dec16
Dec            202        (4,090)         4,292 105%
Citrix Systems Ft Lauderdale FL Dec16
Dec            200            131              69 53%
Juniper Networks Sunnyvale CA Dec16
Dec            197            198               (1) -1%
L-3 Communications Holdings New York NY Dec16
Dec            192             (56)            248 443%
Whirlpool Benton Harbor MI Dec16
Dec            186            189               (3) -2%
First Republic Bank San Francisco CA Dec16
Dec            179            140              39 28%
Waters Corp Milford MA Dec16
Dec            174            151              23 15%
Mead Johnson Nutrition Evansville IN Dec16
Dec            168            131              37 28%
Quest Diagnostics Madison NJ Dec16
Dec            167            200             (33) -17%
Comerica Dallas TX Dec16
Dec            164            116              48 41%
Yahoo! Sunnyvale CA Dec16
Dec            164        (4,432)         4,596 104%
Dover Corp Downers Grove IL Dec16
Dec            161            137              24 18%
CR Bard Murray Hill NJ Dec16
Dec            160            136              24 18%
Raymond James Financial St. Petersburg FL Sep16
Dec            147            106              41 39%
Rockwell Collins Cedar Rapids IA Sep16
Dec            145            133              12 9%
Xilinx San Jose CA Mar16
Dec            142            131              11 8%
Eastman Chemical Kingsport TN Dec16
Dec            130            125                5 4%
Maxim Integrated Products San Jose CA Jun16
Dec            130              67              63 94%
Crown Castle Intl Houston TX Dec16
Dec            125            143             (18) -13%
Linear Technology Milpitas CA Jun16
Dec            124            122                2 2%
J B Hunt Transport Services Lowell AR Dec16
Dec            118            117                1 1%
Fastenal Winona MN Dec16
Dec            115            112                3 3%
Dow Chemical Midland MI Dec16
Dec              84         3,631        (3,547) -98%
PPG Industries Pittsburgh PA Dec16
Dec              81            299           (218) -73%
WestRock Norcross GA Sep16
Dec              79              30              49 163%
WW Grainger Lake Forest IL Dec16
Dec              68            149             (81) -54%
Netflix Los Gatos CA Dec16
Dec              67              43              24 56%
SL Green Realty New York NY Dec16
Dec              54              74             (20) -27%
Vertex Pharmaceuticals Boston MA Dec16
Dec              28             (75)            103 57%
Interactive Brokers Group Greenwich CT Dec16
Dec              21            121           (100) -83%
Alliance Data Systems Plano TX Dec16
Dec              11            180           (169) -94%
ServiceNow Santa Clara CA Dec16
Dec             (33)             (37)                4 12%
Halliburton Houston TX Dec16
Dec           (153)             (26)           (127) -488%
Schlumberger Ltd Houston TX Dec16
Dec           (194)           (989)            795 80%
Baker Hughes Houston TX Dec16
Dec           (413)        (1,035)            622 176%
Ford Motor Dearborn MI Dec16
Dec           (783)         1,868        (2,651) -142%
Caterpillar Peoria IL Dec16
Dec        (1,167)             (90)        (1,077) -1197%
Hess Corp New York NY Dec16
Dec        (4,898)        (1,791)        (3,107) -173%










Total all 128




    107,130       89,894       17,236 19.2%












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