Dan FrommerEvery earnings season, companies share the details of their financial performance. Additionally, many managers will reveal what they are seeing and what they are expecting for the economy.
The view out of Q1 2013?
Things have turned a corner, but it’s still slow going.
For instance, China is slowing down, but not so much that it will disrupt markets.
North America is looking great, especially in Mexico.
Among regions, it’s really just the European Union that’s really struggling — but even there, we may have bottomed out.
Consumer sentiment remains solid, even in the face of the sequester. And at least one company believes we’d be able to weather a pullback in dovish monetary policy.
Some companies are seeing scattered softness.
But overall, the snapshots indicate strength.
'Our customers are much closer to the end consumers and their buying patterns than we are, so we rely pretty heavily on our customer feedback in this regard. They have indicated that customer sentiment is still pretty good in spite of all the macroeconomic noise, elimination of the payroll tax holiday, the sequestration, Europe, weather and et cetera.
'We're in certain programs that are priorities for the defence Department, and things that aren't firm commitment aren't being cut right now. We did see a decline in service orders. Some of that was versus comparisons we had last year. And we'll have to see how that plays out for the year. It was down about 14% in the quarter on revenue.'
Source: GE Earnings Call via Goldman Sachs
'This quarter same-restaurant traffic at our three large brands was negative and certainly some of the external factors we're all aware of including the payroll tax increase, the spike in gasoline prices and more severe winter weather this year contributed to that.'
Source: Darden Earnings Call via Goldman Sachs
'When we look at the activity in the mining segment, we think that that's a good indicator that there's not going to be a lot of commodity pressure, not a lot of commodity pricing pressure. So we don't think inflation goes higher from here.'
Source: Pentair Earnings Call via Goldman Sachs
'Client activity levels were mixed across our Investment Banking businesses during the quarter. Debt underwriting activity continued at the robust pace we experienced in the fourth quarter as corporate issuers took advantage of a low interest rate environment and strong investor demand. Equity underwriting activity improved sequentially with higher issuance activity but is still relatively muted by historic standards.
'As for currencies, we remain fully hedged on the euro, yen, and sterling for 2013 and into 2014... we do believe that the weaker yen will ultimately be beneficial for the Japanese economy and for our business.'
Source: Coke Earnings Call via Goldman-Sachs
'If we do anything, it won't be before late summer, early fall. The fact that inflation has stabilised a bit, the fact that our food costs actually improved in the quarter and the fact that the economy is sending mixed signals again. It seems like the economy is off to a great start and then every time, about this time every year for the last two years in the spring, we get mixed signals on consumer confidence and job creation and things like that. So, I think the idea of being patient and let some time pass and let's see what happens with inflation over the next few months. Let's see what happens with our transaction trends. Let's see what happens with consumer confidence in the economy.'
Source: Chipotle Earnings Call via Bloomberg