Friday, December 21, 2018

The Key US Basic Manufacturing Companies Pretax Earnings During the Trump Administration: Substantial and Continuing Earnings Deterioration From the Superlative Pretax Earnings Increase of 30% in the December 2016 Quarter, Which Was the Quarter Immediately Before the Trump Administration Took Office


From a review of SEC filings, I found 105 US Basic Manufacturing Companies with stock market caps earlier in 2018 of more than $10 Bil and which have filed their quarterly financial statements with the Securities and Exchange Commission (SEC) in each of the 8 most recent quarters.

I define the key US Basic Manufacturing Companies as all US Companies with Standard Industrial Classification

 Codes (SICs) in the 2000s and 3000s filing with the US SEC excluding all Oil & Gas Companies, all Technology Companies and all Health Care Companies.


My Focus is on Pretax Income rather than on After-Tax Net Income because Corporate Income Taxes are simply a transfer of financial wealth between US Corporations and the US Federal, US State and Foreign Governments.  It has nothing whatsoever to do with Company Operating Performance.

The December 2016 quarter, which was immediately before the Trump Administration took office, showed a superlative 30% total pretax earnings growth over the December 2015 quarter for these 105 US key Basic Manufacturing Companies.

Then the quarterly earnings trend for the following 7 quarters from March 2017 quarter through the most recent September 2018 quarter showed a substantial and continuing quarterly pretax earnings deterioration from the preceding year's quarter, shown as follows:



  • December 2016 Quarter (The Obama Administration's Last Quarter in Office) Pretax Earnings Growth Was 30% Higher Than That in the December 2015 Quarter.
  • March 2017 Quarter (The Trump Administration's First Quarter in Office) Pretax Earnings Growth Decelerated Down to 10% Higher Than That in the March 2016 Quarter. 
  • June 2017 Quarter (The Trump Administration's Second Quarter in Office) Pretax Earnings Were 5% Lower Than That in the June 2016 Quarter.
  • December 2017 Quarter (The Trump Administration's Fourth Quarter in Office) Pretax Earnings Were 34% Lower Than That in the December 2016 Quarter.
  • Most Recent September 2018 Quarter (The Trump Administration's Seventh Quarter in Office) Pretax Earnings Were 50% Lower Than That in the September 2017 Quarter.

I suggest this absolutely horrible quarterly earnings deterioration trend in the key US Basic Manufacturing Sector is one of the main reasons for the US stock market plummeting in the month of December 2018. 

Real Earnings and Projected Earnings Drive Stock Prices.  The Stock Market is Smarter Than Any Single Investment Analyst.  The Last Thing the Stock Market Wants To See is Substantial Real Earnings Deterioration.

Of these 105 US Basic Manufacturing Companies, 90 of them have a most recent quarter end of September 2018.  

The below chart shows the Gold-Standard US GAAP Quarterly Pretax Income (Loss) From Continuing Operations for each of the most recent 8 quarters as compared to the prior year's quarter for each of these 105 key US Basic Manufacturing Companies.







US
US
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US


US
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US
GAAP
GAAP
GAAP
GAAP
GAAP
GAAP
US
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GAAP
GAAP
GAAP
GAAP
GAAP
GAAP
US
US
Pretax
Pretax
Pretax
Pretax
Pretax
Pretax
GAAP
GAAP
Pretax
Pretax
Pretax
Pretax
Pretax
Pretax
GAAP
GAAP
Income
Income
Income
Income
Income
Income
Pretax
Pretax
Income
Income
Income
Income
Income
Income
Pretax
Pretax
(Loss)
(Loss)
(Loss)
(Loss)
(Loss)
(Loss)
Income
Income
(Loss)
(Loss)
(Loss)
(Loss)
(Loss)
(Loss)
Income
Income
Aug
Aug
May
May
Feb
Feb
(Loss)
(Loss)
Aug
Aug
May
May
Feb
Feb
(Loss)
(Loss)
Sept
Sept
June
June
March
March
Nov17
Nov16
Sept
Sept
June
June
March
March
Nov16
Nov15
Oct
Oct
July
July
April
April
Dec17
Dec16
Oct
Oct
July
July
April
April
Dec16
Dec15

or Nov
or Nov
or Aug
or Aug
or May
or May
Jan18
Jan17
or Nov
or Nov
or Aug
or Aug
or May
or May
Jan17
Jan16

2018
2017
2018
2017
2018
2017
or Feb18
or Feb17
2017
2016
2017
2016
2017
2016
or Feb17
or Feb16

Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
Quarter
US Basic Manufacturing Cos
End
End
End
End
End
End
End
End
End
End
End
End
End
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End
mils $
mils $
mils $
mils $
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mils $
mils $
mils $
mils $
mils $
mils $
mils $
mils $
mils $
mils $
       
Procter & Gamble       3,940     3,751     2,289     2,927     3,253     3,336       4,033     3,256     3,751     3,738     2,927     2,686     3,336     3,226     3,256     3,803
Philip Morris       3,032     2,857     2,939     2,531     2,206     2,199       3,061     2,433     2,857     2,792     2,531     2,558     2,199     2,235     2,433     1,710
Coca-Cola       2,847     1,674     2,883     2,624     1,833     1,507          937        515     1,674     1,428     2,624     4,299     1,507     1,894        515     1,538
PepsiCo       2,697     2,776     2,900     2,774     1,657     1,721       2,331     1,831     2,776     2,604     2,774     2,731     1,721     1,387     1,831     1,951
General Motors       2,630     2,430     2,885     2,967     1,576     3,473       2,993     2,198     2,430     3,609     2,967     3,621     3,317     2,490     1,985     3,058
Altria Group       2,608     2,644     2,557     2,910     2,466     2,091       2,183   15,708     2,644     1,727     2,910     2,534     2,091     1,883   15,708     1,973
Caterpillar       2,142     1,531     2,195     1,164     2,139        284       1,119   (1,347)     1,531        379     1,164        737        284        364   (1,347)      (248)
Boeing       2,133     2,583     2,586     2,462     2,839     2,145       2,972     2,103     2,647     2,203     2,469      (479)     1,959     1,741     2,103     1,099
3M       1,965     1,997     2,350     2,142        965     1,737       1,672     1,610     1,997     1,862     2,142     1,835     1,737     1,746     1,610     1,463
Honeywell       1,858     1,778     1,999     1,778     1,909     1,724       1,617     1,432     1,783     1,632     1,778     1,755     1,724     1,628     1,432     1,653
United Technologies       1,768     1,940     2,834     2,064     1,890     2,054       1,705     1,273     1,940     2,026     2,064     2,112     2,054     1,722     1,273        186
Mondelez Intl       1,507     1,254        339        584     1,251        787          988          15     1,265        588        584        589        787        606          15      (684)
Constellation Brands       1,365        634        902        472        588        624          644        484        631        517        479        469        624        350        484        399
Dow Chemical       1,353     1,429     1,716     1,814     1,740     1,128     (1,572)      (198)     1,429     1,089     1,814     3,357     1,128        165      (198)     4,148
LyondellBasell Industries       1,347     1,438     1,634     1,593     1,534     1,120       1,342     1,052     1,438     1,281     1,593     1,438     1,120     1,462     1,052     1,059
Ford Motor       1,094     1,770     1,349     2,266     1,919     2,251       1,889   (1,117)     1,757     1,387     2,259     2,875     2,243     3,651   (1,117)     1,896
Nike          997        879     1,270     1,072     1,215     1,168       1,159     1,323        879     1,114     1,072     1,281     1,168     1,073     1,323     1,135
Deere & Co          988        733     1,200        896     1,387     1,174          523        328        733        425        896        715     1,174        733        328        349
Nucor Corp          923        371        914        508        516        549          322        255        371        484        508        390        549        170        255      (195)
Illinois Tool Works          835        906        894        819        849        749          796        726        906        763        819        751        749        668        726        634
Colgate Palmolive          820        900        888        829        924        862          896        934        900     1,046        829        919        862        839        934      (146)
Kraft-Heinz          814     1,359     1,046     1,590     1,254     1,250       1,331     1,280     1,359     1,105     1,590     1,366     1,250     1,272     1,280     1,030
Cummins          805        622        715        599        523        548          596        508        622        382        599        575        548        465        508        212
Danaher          801        730        835        645        713        585          979        696        730        477        645        655        585        784        696        601
Corning Inc          758        479        864        592      (465)          20          566     2,404        479        257        592     1,703          20      (672)     2,404        169
Tyson Foods          757        580        723        617        423        519          842        912        580        531        617        711        519        644        912        712
Emerson Electric          738        685        768        621        658        565          503        464        685        674        621        656        565        552        464        434
Paccar          669        582        720        539        669        448          604        419        582        495        539        646        448      (430)        419        499
International Paper          645        502        420          (3)        451        265          291        281        548        416          (9)          31        292        380        327        298
Praxair          636        597        657        577        620        553          607        571        597        464        577        555        553        499        571        594
Estee Lauder          633        549        261        207        480        407          690        600        549        403        207        130        407        370        600        616
Archer Daniels Midland          632        225        652        383        464        458          543        629        225        480        383        407        458        306        629        701
Textron          628        203        260        215        218        121          223        294        203        107        215        260        121        215        294        294
Kimberly Clark          600        803        603        742        201        782          768        789        803        790        742        795        782        767        789        596
V F Corp          599        551        186        136        294        269          460        261        461        585        146        175        271        293        299        518
Ingersoll Rand plc          530        445        587        492        167        156          325        268        445        451        492        852        156        171        268        308
Air Products & Chemicals          529        479        552        196        480        405          455        337        479        391        196        402        405        378        337        384
Steel Dynamics          507        234        475        235        296        304          161            3        234        243        235        221        304          97            3      (418)
Ecolab          482        526        458        377        317        312          550        489        525        509        379        347        311        305        489        261
Rockwell Automation          482        274        252        276        300        230          298        258        274        237        276        252        230        217        258        237
Celanese          462        289        442        281        432        240          265        156        289        281        281        275        240        318        156      (270)
Parker Hannifin          460        374        498        401        470        315          360        321        374        292        401        336        315        273        321        230
Eastman Chemical          459        403        430        359        350        341          199        113        403        289        359        324        341        323        134        117
General Mills          458        679        507        577        445        560          520        477        679        723        577        596        560        478        477        525
Kellogg          452        389        669        385        511        307          592        (34)        401        354        384        386        304        222        (34)      (108)
Bunge Ltd          452        121        (15)          26            2          82            (8)        372        121        170          26        163          82        275        372        224
PPG Industries          451        523        479        659        421        446          376        138        521      (426)        671        630        448        456        140        390
Eaton Corp plc          439     1,694        694        572        565        467          635        559     1,691        573        570        553        464        442        559        555
Amphenol          420        358        382        317        355        298          379        324        358        311        317        284        298        222        324        276
Molson Coors Brewing          410        441        523        460        357        281          201     2,438        432        223        450        197        273        181     2,434          42
Westlake Chemical          391        328        381        227        386        201          325        114        328          63        228        182        201        198        114        178
WestRock          375        246        356        387        243        142            60          82        246      (156)        387        252        142          93          82          55
CNH Industrial NV          362        122        526        346        265          97          190        215        121          71        360        236          97      (473)        215        332
Hershey          357        401        260        281        449        168          260        199        401        328        281        233        168        340        199        320
Monster Beverage          343        321        358        347        282        265          268        247        321        289        347        288        265        255        247        229
Mosaic          340        247          72          75        (10)            9            60            9        247          11          75        (21)            9        228            9        141
Lear Corp          332        393        453        400        452        408          378        331        393        323        400        396        408        361        331        328
Hormel Foods          322        330        258        278        297        316          305        355        330        365        278        274        316        324        355        354
Cintas          321        206        241        219        241        132          175        178        206        187        219        190        132        184        181        177
Roper Technologies          312        265        313        255        255        211          303        258        265        240        255        225        211        217        258        315
Brown Forman          310        331        242        229        128        197          289        258        331        276        229        201        197        715        258        266
Stanley Black & Decker          305        354        294        358        252        473          342        282        354        328        358        362        473        254        282        306
Aptiv plc          297        337        386        344        375        248          357        193        473        363        448        355        413        410        332        285
Fortive Corp          296        348        356        326        313        272          338        315        348        300        326        319        272        263        315        338
Hasbro          296        350          68          87        (88)          71          279        220        350        346          87          67          71          59        220        231
BorgWarner          283        274        315        297        332        286          206      (465)        274        142        297        260        286        254      (465)        197
TransDigm Group          282        247        266        236        247        215          191        139        247        209        235        194        215        200        139        164
Mohawk Industries          278        372        316        344        257        269          332        300        372        365        344        346        269        230        300        219
Packaging Corp of America          274        217        245        209        187        179          224        169        217        183        209        178        179        159        169        154
Tesla          271      (671)      (729)      (386)      (779)      (372)        (780)      (208)      (671)          30      (386)      (290)      (372)      (278)      (208)      (315)
JM Smucker          269        292        173        189        264        162          116        198        292        266        189        253        162        210        198        275
Clorox          268        279        306        295        242        247          227        227        279        264        295        252        247        237        227        230
Masco          262        264        312        262        200        210          161        173        256        227        255        253        213        177        173        160
Campbell Soup          257        382        196        417      (517)        270          211        177        382        429        417        (65)        270        240        177        387
PVH Corp          253        250        202        151        216          84            25        125        250        169        151        115          84        266        125        148
Arconic          249        172        194        269        199        484        (455)        (45)        172        122        269        176        484        161        (45)        (18)
Ametek          245        204        248        203        236        191          198        145        204        174        203        191        191        183        145        183
Whirlpool          223        268      (609)        212        109        198          209        308        268        305        212        286        198        215        308        282
Ralph Lauren          215        191        133          87          25      (269)          186        123        191          74          87        (33)      (269)          61        124        181
Garmin Ltd          201        190        236        234        154          88          180        169        186        150        228        204          88        108        169        153
Ball Corp          199          55        166        122        159          92          276        101          55          57        122        193          92      (210)        101
McCormick & Co          198        141        156        127        152        127          233        219        141        162        127        120        127        125        219        209
Keurig Dr Pepper          194        163          99          89        140          88          324        256        317        342        282        402        248        281        256        291
Dover          193        207        211        198        161        232          274        216        237        181        211        198        161        232        216        169
Church & Dwight          187        187        155        117        201        190          199        170        187        192        117        171        190        173        170        165
Albemarle          177        149        391        137        159          75          171          85        149        127        137        119          75        244          85        139
Autoliv          171        151        210        201        197        194          (11)        228        133        185        190        200        194        190        228        265
Xylem          161        131        150        121          95          70          144          90        131          95        121          90          70          65          90        128
Mettler-Toledo          160        140        144        127        117        114          194        181        140        133        127        103        114          86        181        161
Conagra Brands          157        334        236        274        107          93          258        247        334        193        274        268          93      (196)        247        105
Michael Kors          152        239        206        150          74        (41)          278        342        239        203        150        186        (41)        246        342        409
Lamb-Weston          146        132        131        120        167        132          125        125        132        134        120          66        132        162        125        116
Tapestry          145        (42)        173        179        142        147          324        272        (42)        160        179        109        147        128        272        255
Idex Corp          133        114        137        113        130        104          124          73        114          99        113        104        104          93          73          89
A.O. Smith          132        132        146        128        125        120          141        116        132        118        128        124        120        104        116        109
FMC Corp          110          59        140          52        332          54            15          12          59          55          52          67          54          46          54        (77)
Pentair plc          102          83          99            2        132        104          124        125        175        150          87        169        104        117        125        134
Intl Flavors & Fragrances          101        141        122        142        159        138          115        103        141        113        142        152        138        155        103        103
Heico            99          86          96          74          86          75            75          63          86          74          74          68          75          65          63          51
CF Industries            83      (115)        218          29        105        (22)          (17)      (335)      (115)      (131)          29        178        (22)          62      (335)          99
Thomson Reuters            70        143        139          62        199        156          329        275        327        276        206        306        326        184        275        350
Keysight Technologies        (584)          30        113        (25)          83          22          (23)        152          30          98        (25)          97          22          87        152          84
DuPont     (4,948)      (688)        655        806      (189)     1,375     (1,288)        249      (688)      (151)        987     1,333     1,562     1,635        629        287
Newell Brands     (8,013)        (20)        (23)        (55)            2        790          203        393        166        200        271        170        790          52        393        (93)
General Electric   (22,736)        746     1,331     1,127        413        (53)   (12,603)     2,893     1,466     2,074     1,515     3,824        832        238     2,893     1,903
Total 105 Manufacturing Cos     31,135   62,179   67,135   61,864   55,287   54,045     41,065   62,583   63,667   56,063   63,300   66,352   55,210   50,051   63,038   48,514
% Change vs Prior Year Qtr -50% 9% 2% -34% 14% -5% 10% 30%