The World's Biggest Companies Reveal What's Really Happening In The Global Economy

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Earnings season is well under way, with major Dow and S&P 500 components reporting largely better-than-expected numbers.But rather than dwelling on company-specific performance, we wanted to see what the world’s largest companies were saying about the global economy.

We dug through earnings announcements, conference calls and presentations to get a sense of how things are shaping up for the world in 2012 and beyond.

'We've looked at our second quarter and said things look pretty good for us at least. I think the way I'm seeing the world right now is there's the potential for some degree of stability, which hasn't visited us much since 2008. There seems to be a pretty good supply-demand balance or at least a pretty good demand from our standpoint, and our supply cost structure is relatively stable as I commented on. And prices seem to be in the zone, just based on the public reports, that we can earn a pretty good living at. So things look like stability might be happening without us really expecting it.'

Source: Seeking Alpha

CBRE says the recovery has yet to gain its 'sea legs'.

'You get some traction going in the spring of 2011 and people feel that things are a lot better and then there's a shock to the system, the euro sovereign debt issue. And the suddenly the brakes are put on again. And then you get some traction again and then there's the China housing bubble issue. I think that we're going to continue to see these kinds of things through the business until this recovery really gets its sea legs and it's not there. It's getting incrementally better every quarter. The fundamentals that Mike Lafitte referenced are getting better every quarter. But it's going to be a bumpy ride I think for a bit.'

Source: Seeking Alpha

DR Horton says homeowners looking for an upgrade are keeping the housing market alive.

'And generally, we believe that the change in mix towards move-up buyers is the top primary driver behind our increase in our average selling prices right now. We do in a very limited basis see the opportunity to raise prices or reduce incentives somewhat incrementally in some areas right now. But I think by far, the largest factors are changing product mix towards move-up.'

Source: Seeking Alpha

Regions Financial says consumer mortgage originations have picked up considerably.

'I'll tell you on the consumer side, we're still seeing ... we're seeing very strong growth on the residential mortgage segment. We had about $1.6 billion in production in the first quarter, $200 million of that was in a HARP 2 segment and about 60% was refinancing. Our refinance and new home purchase is running about 60-40. We are seeing even stronger pipelines in both consumer and business in the early part of the second quarter. Auto, indirect auto lending continues to be strong with us -- for us, I would tell you that obviously, pricing has gotten more competitive in that segment as well, but we're still pleased with the spreads that we're seeing.'

Source: Seeking Alpha

Online retailers aren't seeing sales decline when they have to collect taxes, Amazon reports

'But again, you can see by the growth that we've experienced over the past few years, which includes during those past few years, certainly adding some geographies, if you will, to our collection efforts. And so those are all represented in the results that you've seen over the past few years and several years. So that's all I can add to that.'

Source: Seeking Alpha

UPS says global trade will pick back up later this year as consumer confidence returns

'I think global trade is going to stay strong. I don't think you're going to see, long term, these trade flows change that dramatically. I think some of that Asia impact clearly has seen weaker consumer demand in Europe than in last year, consumer demand in the U.S. which is picking up now. So I think we're fairly optimistic. You're going to see later this year some of the Asia export numbers start picking up again.'

Source: Seeking Alpha

AT&T says businesses are investing in efficiencies, not bodies.

'From an economy standpoint, I would suggest to you that we -- as I mentioned before, we've not assumed any lift in the economy throughout this year. And quite frankly, to date, I don't believe we've seen it. I think you know very well about the current status of unemployment metrics, interest rates, business starts. But I will tell you that a couple of things have gone on in the sense of we continue to see large business willing to invest in strategic services and the efficiencies they bring.'

Source: Seeking Alpha

McGraw-Hill says schools are getting into Apple products.

'One of the things that we launched last year that's doing very well is with our relationship with Apple, 5 titles on the iPad, and that was aimed at high schools. Other programs like the CINCH maths and CINCH Science and things like that are also doing very well. But there has to be a funding receptivity in that... Now we got to get some help in the markets, especially in K-12, on that part. But where we can see people replacing product, traditional product, you're going to start to see even more receptivity...Now we got to get some help in the markets, especially in K-12, on that part. But where we can see people replacing product, traditional product, you're going to start to see even more receptivity.'

Source: Seeking Alpha

Cliffs Natural Resources sees inflation almost everywhere.

'We're seeing the same inflationary pressures on just about in every area of the business that you can imagine going through. We do get a little bit of an offset from the natural gas, which is very nice. But also have a lot of increased pressure on the electrical power pricing as well that goes with it. It kind of offsets things. The increased diesel fuel certainly isn't helping things.'

Source: Seeking Alpha

Monster Worldwide says economic uncertainty prevails.

'At the beginning of last quarter, many predicted steadily improving global economy. That view has now changed, and many fear a failure of the recovery and weakening business conditions, particularly in Europe. The optimism of last quarter was overstated, and we trust that the current pessimism is also overstated. However, it is difficult to predict how this uncertainty will be resolved, and therefore, we are positioning the company both offensively and defensively. Offensively, we are aggressively pursuing the objectives I've just discussed. Defensively, we continue to be extremely careful not to let spending get out in front of market conditions.'

Source: Seeking Alpha

Boeing says not to count on the number of domestic carriers shrinking quite yet.

'Obviously, U.S. Air does have more Airbus aeroplanes than Boeing aeroplanes right now, and American has got more Boeing aeroplanes than Airbus aeroplanes..If it happens -- it's not clear that this one's going to happen, by the way, in our view. But if it does, we'll confront the environment that we've confronted before and we tend to do pretty well.'

Source: Seeking Alpha

Pepsi says the healthiest market in the world right now may be in Eastern Europe and Russia.

'I'd say that region of the world is looking good. And as we looked at upping our investment in Russia a year ago, the fundamentals of that region of the world are good because you've got huge oil reserves in Russia. You've got a well-managed economy on many economic fronts. And so we look at that part of the world and say the prospects for the whole Russia-CIS-East European cluster, if you want to think of that as one cluster, is very strong. And again, strong is a relative term but it is good. And so in this world today where you've got GDPs ranging from negative to sort of high-single digits, this Russia-East Europe cluster is looking like a solid 2% to 4% GDP growth. That's very good today, and we're feeling good.'

Source: Seeking Alpha

Nielsen says different emerging markets are in different stages of emergence.

...in terms of margin expansion, so our Latin America business overall is very profitable. And as you mentioned, Brazil is a place where it doesn't require a lot of investment and you've got great competitive dynamics, and as Dave mentioned, it's growing double digits. So those benefits will accrue to us. How farther ahead is Brazil than the other markets? I always describe it as probably Brazil is in the late innings of the game, and China is in the early innings, Africa is just getting started.'

Source: Seeking Alpha

PPR, owner of luxury brands, says Europeans are still buying up expensive discretionary goods

'Bottega Veneta delivered another excellent performance in the first quarter of 2012, with revenue jumping 33% on a comparable basis and 39% in reported terms. The brand's outstanding performance spanned all geographic areas: Western Europe (up 28%), North America (up 36%), Asia-Pacific (up 45%) and Japan (up 16%). All distribution channels contributed to growth, fuelled by the overwhelming success of the brand's iconic Leather Goods articles and its Cruise and Spring/Summer collections. Online sales more than doubled compared to the first quarter of 2011.'

Source: PPR

Coach now sees men's accessory sales as a real business, with it to double this year

'We're also excited about the results we're achieving globally in our Men's business, which remains on track to double to over $400 million this year. Given the success of Men's, we are now accelerating the rollout of Men's within existing retail stores. By the end of this fiscal year, we expect to have a broader expression of Men's in nearly 100 Coach retail stores in North America, up from 42 at the end of the third quarter. Outside the U.S., where Men participate in the category at a higher rate, new dual gender and dedicated men's shops are the primary distribution growth vehicles.'

Source: Coach

Procter & Gamble sees big declines in pet care as the market contracts

'Pet Care volume decreased double digits driven by market contraction and the impact from the partial restocking of products following the supply disruption in the prior year period.'

Source: Procter & Gamble

Caterpillar says whatever landing is occurring in China is a good thing

'Those two goals, actions and goals in my mind are extremely healthy. We were seeing a market that was too hot, boiling, in our industry and many others--real estate, housing prices and all the other things. China acted to curtail that and they did. I think they did a very good job in getting that done and then resetting five-year goals for GDP growth.'

Source: Seeking Alpha

JetBlue says Americans are flying again, even during the generally weak first quarter

'Despite an uncertain economic environment, demand trends remain strong throughout the quarter. Passenger unit revenues increased 8% year-over-year even with 12% more capacity as we, once again, outperformed the A4A domestic average. While the first quarter is typically weak from a seasonal perspective, we saw a significant strength in close-in bookings ... the East Coast short-haul markets were, once again, among the best performing markets in our network.'

Source: Seeking Alpha

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