Early 4Q14 Earnings News Suggests Slow 2015

Early Earnings Revealing Slow Growth for Stocks in 2015Financial reports are trickling in, and it’s exactly what the market needs—a fresh dose of news, straight from the horse’s mouth. Unfortunately, the numbers aren’t forming a rosy picture of a strong market in 2015 so far. Instead, early 4Q14 earnings news suggests a slow year ahead.

Early 4Q14 Earnings Reports

Global Payments Inc. (GPN) is a $6.0-billion company you may not have heard of. This Atlanta-based business sells processing solutions to credit and debit card companies. It’s a very good business to be in.

The company’s latest quarter just beat the Street—and by a wide margin on earnings and revenues. Management increased its previous fiscal 2015 guidance.

Sales for the second quarter (ended November 30, 2014) grew a solid 10% to $697 million. GAAP earnings per share grew eight percent comparatively.

A notable earnings miss came from WD-40 Company (WDFC), which is typically a slow but steady grower. For WD-40, revenues grew just one percent comparatively in its most recent quarter and earnings missed estimates by a wide margin. Earlier in December, the company raised its dividend 12% over the previous quarter to $0.38 per share.

A company we’ve considered before in these pages, The Greenbrier Companies, Inc. (GBX) had a pretty decent quarter with earnings improving substantially. This Oregon-based firm is a major supplier to the railroad industry, building new railcars and barges for marine transportation, too. (See “One Industry That’s Holding Up the Rest.”)

The company’s order backlog is at an all-time record. Management guided the company’s fiscal 2015 earnings per share above consensus, while keeping revenues in-line.

AngioDynamics, Inc. (ANGO) is an Albany, New York-based medical device supplier. This firm beat Wall Street consensus with a four-percent gain in sales to $92.0 million. Adjusted earnings beat the average estimate, growing 17% year-over-year. Management increased its adjusted earnings range for the year and the stock moved higher on the news.

Finally, Bed Bath & Beyond Inc. (BBBY) announced earnings that beat the Street, but the company’s revenue growth was a little too modest. Expectations for this mature retailer were pretty low, so the company’s numbers were not a surprise.

Slow Start for Stock Market in 2015

So far, early reporting has been modest and somewhat uninspiring. In any event, share prices have already gone up in anticipation of decent quarterly results. I don’t have high expectations for the main market indices this year.

A number of stocks that report early have seen their share prices sell off after an initial burst off beating the Street.

This could very well be a precursor for the rest of the marketplace.

This market is worn out and a little unsure of itself. If there is an initial trend within current financial reporting, it’s that sales are not materially beating consensus, while earnings are modestly doing so. It’s a familiar situation to previous quarters in 2014, indicating a continued slow-growth environment for a great number of industries.

The main indices were pretty volatile last week, and there is restlessness in the marketplace. Hopefully, large-cap earnings will sooth traders a little. Regardless, it’s difficult to imagine share prices accelerating near-term after the run-up over the last two years.

Once we get into the heart of large-cap reporting, those numbers will be helpful in shaping stock market views going forward.