April 22nd, 2009
12:03 PM GMT
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A Barometer of Earnings.

This week we have had a vast raft of earnings news from top U.S. corporations to digest. Tech companies like IBM and Apple, Internet giants like Yahoo!, banks ranging from Bank of America to American Express to name just a few.

Our task at Quest Means Business has been to make sense of it all... Hence the Q25.

We have carefully chosen 25 companies reporting this week which we believe in total, show the breadth and range of the U.S. economy.

We are giving the companies either a GREEN or a RED apple...and by the end of the week we will be able to guage the strength of the economies.

How do we decide who gets a GREEN or a RED?

Our starting point is whether or not the companies have MET or BEATEN consensus analyst expectations. But that is only the start.

Then we look at whether or not the numbers were met because of special one-off factors. We then move to look at whether there is any guidance for future quarters and what the outlook it. Finally, Maggie Lake and I, along with our producers have a good debate on it... arguing one side or the other until it usually becomes obvious!

A Public Heath Warning – The Q25 is not a scientific index – it is NOT weighted or calibrated. It is anecdotal and it often relies as much on "gut feeling" of those of us at Quest Means Business as the numbers themselves. You should take NO investment decisions on the strength of this.

MONDAY

Bank of America – On the face of it BOA should have got a green, since it made good money. But look behind the numbers and a different story is told; one-off tax gains and other special items massaged the numbers. And the bank had some worrying words on future bad loan provisions. Things are going to get worse. The consensus was BOA was a RED apple

Hasbro – The toymaker saw profits fall by 47 percent, that alone didn't merit a red - but the forecast that things were not getting better led us to give the company a RED Apple

Eli- Lilly – (This is a corrected version) Of course it was a Green apple for Eli Lilly for its better than expected results and sales growth. Most important of all, the guidance was strong

IBM – Big Blue made a profit, but missed its numbers, and failed to meet expectations. Heavily dependant on global trade, it's at the mercy of currency fluctuations at a time when capex is down, world trade is falling and it is still reeling from it's failed bid for Sun Microsystems; there was little doubt it was a RED Apple



soundoff (8 Responses)
  1. Peter Vaz

    Prof. Quest share those red or green apples with us and we don’t mind if it is raw,toxic or rotten….we are just hungry and who waits for expectations. Just press and reset the economy button and all outsourcing will figure out on the bleeding stock exchanges around the world. Real economy is on our hands and not in those companies and if we ourselves are deflated then how will all those 25 Apples make a difference? Crabs in a jar are better than Apples for this deflating Q25.

    April 22, 2009 at 1:21 pm |
  2. Dickens Awiti

    Quest,
    I love to watch your programs, the way you make news so close to us, be it business traveller or Quest means business. I just wanted to ask where in the radar are African countries? I guess there are lots of good business going on in Africa.
    Otherwise, keep banging that bell.
    Dickens
    Nairobi-Kenya

    April 22, 2009 at 6:49 pm |
  3. Rikki, Fargo, ND

    Wow, you're being rather tough on our companies...have you given any green apples yet? :) That's ok, they really deserve a good lashing! Have a good one!

    April 22, 2009 at 6:50 pm |
  4. Seruserry - Dubai

    Hi Mr Richard,

    When did your program has gone back to stone age. Where are those technical analysis of you guys. Putting green apples and red apples in jars cannot be termed analysis. Now that all the analysis have gone wrong and all analysts have proven incorrect, are you trying your luck to make meaninful out of the results of the first quarter. Never these analysis are correct. and what is the justification that corporates are showing more profits in one quarter and suddenly write off the amounts in another quarter. Thus , those following these charts, reports are wasting time and believe me the global economy is undergoing a vast change . The consumption pattern of america right from world war II has gone up dramatically and if american people starts saves money like people in asian countries, then we are heading for dooms day. Good luck guys.....

    April 22, 2009 at 7:01 pm |
  5. Dr. Manfred Buch

    Well, Peter Vaz, Prof. Quest's apples should be at least transformed in some nice pure apple juice – if not Calvados ... in case we prefer some more added values and keep the picture :-)

    Look, Prof. Quest is a dinosaur, and like all other dinosaurs he can not understand his NEW surrounding environment. He keep's on thinking about MAXIMAZATION OF PROFIT where thinking about RISK MINIMAZATION is required. I start to consider the option to send him to Africa to think about himself and learn something extremely precious from African societies :-)

    April 22, 2009 at 7:32 pm |
  6. Peter Vaz

    What a great laughter Dr. Manfred...you see Prof. Quest is too sharp to be a economic conjurer and will he share even the juice with us? I don't imagine at all because he hides under the desk. Maggie Lake's mouth is watering for those apples and the day She wears red....be sure the poor old Dow Jones is bound to bleed.....and the other Anchor at the stock ecxhange....My God! she begins to cry....the heavens begin to fall.

    Prof. Quest can turn down the economy, the way he drowns our depression sorrows with live shows full of laughter and humor and ....who know one fine day he may be elected the next President of the United States of (America not Africa) ...its worth watching his body language rather than the sermons of depressed politicians around the globe. Prof. Quest should share a sip of Green or Red juice to all the G20 leaders to recover from this recession hangovers......the earphones on G20 leaders ears vomits different languages of Biblical Nimrod.

    April 23, 2009 at 4:45 am |
  7. Dr. Manfred Buch

    One additional remark ... and don't blame me ... I'm only the messenger ;-)

    At the latest from 18 June 2003, companies in Europe as well as analysts and investors – the main target group for Management Commentaries (MCs) – became aware of Sustainable Development and its implications for future business development. In accordance with the EU modernisation directive 2003/51/EC as of 18 June 2003, so-called non-financial “Sustainable Development Key Performance Indicators” (SD-KPIs), including information relating to environmental and employee matters additionally have to be disclosed for the first time in Management Commentaries (MCs) for the business year 2005.

    Enjoy another Earth Day :-)

    April 23, 2009 at 11:29 am |
  8. Leslie

    questmeansbusiness.lbogs.cnn.com, how do ou do it?

    March 8, 2010 at 2:55 pm |

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About Quest Means Business

Quest Means Business airs Monday to Friday, 1600 New York and 2100 London, and is hosted by Richard Quest.

 

 

 
 
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