21 Global Behemoths Reveal What's Really Going On In The World Economy

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In this round of our review of mega-companies earnings call transcripts, there seem to be two clear winners: “emerging markets” and agriculture.In particular, China is “back” (if it ever went away…), and Mexico and Brazil are well down the path of creating a buoyant middle class.

And within ag, extreme weather conditions are forcing farmers to make new purchases and adjust their production methods.

But the rest of the world faces a cloudy 2013.

We compiled earnings transcripts from Bloomberg and selected the juiciest portions for your consumption.

Tupperware is trying to adapt to the exploding middle class in Mexico.

'...product-wise, on really moving to separate ourselves from the discount beauty company there, rebranding it more with our Armand Dupree lining, and moving towards higher priced products, and less discounting. That's going to take time, but we're committed to that strategy. It's the right margin and the right image. As you grow a middle class, she doesn't aspire for beauty products that are discounted, she inspires to pullout a tube of lipstick and for her friends to see it, they would say, wow, I'm not poor anymore. That's what middle class becomes in these markets.'

Source: Bloomberg/Company Transcript

3M also really likes LatAm.

'On a geographic basis, Latin America/Canada was once again our fastest growing region, with organic local currency growth of 9.7%. This performance was broad based, with all six of our businesses generating positive organic growth in the region, including double-digit increases in Health Care; Safety, Security and Protection Services; Consumer and Office; and Electro and Communications. Brazil and Mexico both posted impressive results. Brazil grew 11% organically in the face of a still recovering economy, and Mexico grew 10%.

Caterpillar hopes the Fed keeps pumping.

International Paper says emerging markets are not dead yet.

Weyerhaeuser remains bullish on China.

United remains bullish on all of East Asia.

DR Horton remains concerned about California's economy.

'...clearly in California we are proceeding more cautiously in that market than we have in others. And primarily the thing that concerns us most about California is just the state of the California economy. And so as a result, we are continuing to look in California, but I would say to you that we're approaching on a cautious basis. We want to make sure the demand is there. I know that there a number of immigrants are still moving into California and that's a good thing and so as a result I think there's good demand in most of our markets there but it's not as widespread in California as it is in many of our other coastal markets.'

Source: Bloomberg/Company Transcript

US Steel expects to benefit from ultra-low coal prices.

Briggs and Stratton says weather impacts end up offsetting each other.

Swift Transportation says weather-related disruptions were followed by weather-surges.

Raytheon says the future remains cloudy for domestic defence.

'...from a sales perspective, we see our domestic business down, offset partially by strength in our international business. We expect 2013 adjusted margins to continue to be solid and in the 12.3% to 12.5% range. Given the existing uncertainty that the industry faces and to give us flexibility, we've included 20 basis points of costs in our 2013 margin guidance related to accelerating facility utilization improvements and operating initiatives.

McCormick says Americans will never move out of flavour country.

Starbucks claims 10 per cent of America got a SBUX gift card for Christmas.

CSX sees unfavorable conditions in 29 per cent of its markets.

'Looking forward, we recognise the economic environment has moderated and uncertainty remains. While we expect stable- to-favourable conditions for 71% of our markets, we expect an unfavorable environment for the remaining markets and an overall neutral outlook for the first quarter.'

Source: Bloomberg/Company Transcript

AT&T says people are stuck.

DuPont says the ag sector has swerved by most macro potholes.

'We expect another very good year in terms of planting and farmer economics. Our order book for seed is strong, even ahead of last year, which was exceptionally robust. We are seeing strong demand for our new products, and expect to build on our momentum from 2012 with another strong year.'

Source: Bloomberg/Company Transcript

Monsanto is already ready to declare 2013 a banner year.

'With the strong results we've seen for the quarter and the momentum we see in the U.S., we have better early visibility than a typical year. That is what gives me the confidence to raise our full year earnings and free cash outlook even though we are still at a very early point in the year. With the U.S. season developing in the second quarter, we'll begin to see these early trends translate into earnings. So I like the position we're in to deliver another strong year of growth.

United Rentals says the back-9 of 2013 should see tailwinds.

'...we agree with forecasters who think most of the market momentum in 2013 will come in the back half of the year. This is all good news, but I'll reinforce something I've said in the past, we believe our strategy, our scale and our customer service will keep us growing faster than our end markets.

Verizon says it took more than a year to negotiate a new labour contract.

'On the labour front, after 400 days of negotiations with our unions, we have a fair and balanced three-year agreement that is good for our employees as well as a positive for the business.

Bank of America says fears about Washington helped the last quarter go gangbusters.

'Overall, client activity in the wealth management business in the quarter across all categories was quite robust and was aided by clients' actions due to the fiscal cliff.'

Source: Bloomberg/Company Transcript

Alcoa says central banks have created a new type of metals investor.

'You've heard what pretty much every central bank is saying all around the world. The moments that the interest rates are going up, the world economy has picked up again, the moment the world economy picks up, you have the compensation through physical demand and physical demand will basically then be there to take up the metal. But so I'm not concerned about that… I think this is a new phenomenon that you all have to build into your models. You see that there's a new type of investor there that is interested in metal as an investment as much as in other things as an investment, as a low risk investment.

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