Corporate earnings are also referred to as “company earnings” and “corporate profits:” basically, the amount of money a company makes in certain period of time. The price/earnings multiple is still the most common tool used to value a company. The stock market values a company based on the amount of money—the earnings and profits—the company has after all expenses, including taxes, have been paid. In a stock market where stocks are traded at an average of 12 times earnings, a company making $1.00 a share per year would be valued at $12.00. All things being equal, the more money a public company makes, the higher its stock price.
As of July 24, 187 companies in the S&P 500 have reported their corporate earnings. For these 187 companies, their average decline in earnings has been 2.2%. If this is the final number, then it will be the biggest decline in quarterly earnings for the S&P 500 since 2009. (Source: FactSet, July 24, 2015.)But it may get worse. Only. Read More
Whole Foods Market, Inc.’s (NYSE/WFM) stock price plunged 11% on Thursday, July 30th, after the company reported disappointing results.During the third quarter, total sales increased eight percent to a record $3.6 billion. But diluted earnings per share landed at $0.43 below consensus expectations of $0.44 cents per share. (Source:. Read More
No matter where you look, major economic hubs in the global economy are struggling to show growth.According to the German finance ministry, Germany’s economy grew at only 0.3% in the second quarter of this year after growing a similar amount in the first quarter. (Source: Reuters, July 19, 2015.) Germany is the fourth biggest economy. Read More
Stock market advice for a market already at or near its all-time high is just guesswork. This market could crash on some material event, it could stay in consolidation for several quarters, or it could tick higher in anticipation of a better 2016.What has happened is that expectations for corporate earnings have come down tremendously.. Read More
While corporate earnings are managed and the whole Wall Street “consensus” game is kind of a misnomer, financial reporting is the backbone of business. And it’s valuable information when it comes to stock market investing in a variety of companies.Early corporate reporting is often from mature, brand-name companies that can. Read More