sábado, 25 de julio de 2015


Cuando los cerebritos de la City porteña nos dicen, estos días, que la suba del dólar se debe a la desconfianza de los inversores, o a que Zanini es poco confiable, o que Macri se afeitó demasiado el bigote, o cualquier otra idiotez de esas que sacan de la galera, vos deciles que sí, que tranquilos, que se tomen la pastilla y vuelvan a la cama. 

Las monedas de todo el planeta se están derritiendo frente al dólar. Mucho más grave que acá es lo que pasa con el peso mexicano o el dólar australiano. Pero vayamos al fenómeno de fondo: estamos viviendo una depresión global, chicos. Nadie fabrica nada, nadie vende nada, nadie compra nada. Las manifestaciones son múltiples, si bien, en estos días, destacan tres: China, commodities, moneda. Leemos en Zero Hedge de hoy:   

Título: The Three Cs Keeping CFOs Up At Night: China, Commodities, Currencies

Texto: A little over a third of companies have reported so far in the second quarter earnings season, and as of this moment the Q2 EPS and revenue declines are set for a -2.2% and 4.0% decline, respectively. To be sure, if one excludes energy companies re-crushed by the latest plunge in oil now that the first half dead cat bounce is over, earnings look much better but then again if one excludes AAPL things get even worse.

Unfortunately for corporations and the broader S&P, the Q2 revenue and earnings recession will be validated when Q3 and Q4 also post broad declines in sales and EPS. According to Factset, analysts are expecting year-over-year declines in earnings to continue through Q315, and year-over-year declines in revenue to continue through Q415.

Having finally admitted that for the first time since the "recovery" the corporate profitability market is signalling that something is very wrong, sellsiders at least have their traditional fall back: optimism, and analysts are looking for record level EPS to resume in Q4 2015. Analysts expect net profit margins to remain relatively flat in the 2nd half of 2015 with the profit margin being reported for Q2.

The question is not whether they are wrong, they are - the question is by how much. The answer will be determined largely by any/all of the following three "C"s which continue to define the ugly face of non-GAAP corporate earnings for the past 3 quarters which appear set to persist for the foreseeable future.
The three C's in question: China, Commodities and Currencies (or rather one currency, the US Dollar).

Here is a sampling of the Q2 conference call soundbites on these three so important variables for corporate profitability.


“Turmoil in China's equity market has reached unprecedented levels, and the impact of intervention is yet to be fully understood by our markets.”
–BlackRock (Jul. 15)

In Asia/Pacific, the sales decline was primarily due to lower sales in China and Japan. In China, the lower sales resulted primarily from continued weak residential construction activity... As we expected, mining continues to be severely depressed, construction-related sales in China and Brazil are substantially lower than 2014 and orders related to oil and gas are down significantly which will likely lead to lower sales in the second half of 2015. 
- Caterpillar (Jul. 23)

“So, we have seen in China some slowdown. I wouldn't call it acute. There's some dynamics, of course, of generic competition in China and an overall slower growth in economic growth. So we are seeing that, but I think we're well positioned… So I wouldn't call it acute, but I would say we've seen some slowdown in the overall market growth in China.”
–Johnson & Johnson (Jul. 15)

“I think the good news is that sales are recovering. We went from minus 12% to minus 10% despite a more difficult lap of plus 15%. The good news is that the consumer metrics are improving, trending in the right direction. As always, these are never linear, unfortunately, but we do know that when we compare this to previous recoveries, we’re going in the right direction, making progress across the board. So I feel good, and we remain obviously bullish on China. We continue to invest in China. And I think as you know, these customer metrics are the harbinger of future sales performance.”
–YUM! Brands (Jul. 15)

 “And we’re experiencing really broad-based growth on both our McCormick brand and on our acquired brands across China. And we recognize that there’s been some slowdown in economic growth in China, but our categories continued to do well, and our brands in particular had really broad-based growth in this quarter. And we don’t really see any change in that trend.”
–McCormick & Company (Jul. 1)

“John, we don’t see a correlation. We think actually a very small percentage of customers have been impacted by that [decline in the Chinese stock market]. As to whether or not it has impacted broader consumer confidence, we have no reason to believe it at this stage that that is the case.”
–YUM! Brands (Jul. 15)


The bulk of pure-play energy companies, E&Ps and majors whose earnings have been crushed in the past 3 quarters are set to report, with the bulk coming out next week. In the meantime, here is the generally favorable opinion on lower energy prices from those companies benefiting from lower oil and gas prices.

“For the remainder of the year, we are approximately 15% hedged against an increase in prices with approximately 85% downside participation to Brent prices of $40 per barrel. Overall, we continue to expect fuel costs to be an enormous tailwind and provide a net benefit of more than $2 billion for Delta this year. We are also well positioned to benefit if fuel remains at these levels through 2016.”
–Delta Airlines (Jul. 15)

“We’re still seeing a bifurcated consumer with some level of growth in premium, and our gourmet brand is an example of that and niche category, so there is some growth. We’re seeing some recovery in food service with people eating out. So we are seeing some of those lower gas prices find their way in.”
- McCormick & Company (Jul. 1)

“We’ve had a lot of discussion around the gas – what we call the gas dividend that’s going back to the consumer. I think there’s a lot of expectation that that was going to stimulate traffic. And what I’ve been saying is we haven’t seen it stimulate traffic, but we have seen it change the consumer behavior once they’re in our building. And they’re not seeking the deals the way they were years ago. We’re seeing consumers buy more add-ons. They’re buying wine, dessert, apps.”
–Darden Restaurants (Jun. 23)

“Declining prices at the pump have benefited our customers, especially those most financially stressed. The lower end customer benefits the most from lower gas prices relative to income. This trend is encouraging, but we understand this is just one of many factors that impact our business. While gas prices have increased more recently, prices are still around $1 a gallon below last year” –AutoZone (May 26)


Unlike commodities where the resumption of falling oil prices is seen as favorable for some, the renewed surge in the US Dollar is unilaterally a concern for everyone.

“Sales volumes in most of our non-domestic businesses were positive. But growth was insufficient to offset the drag from currency devaluation, which was slightly worse than anticipated in the quarter.”
- Sherwin-Williams (Jul. 16)

“I do want to point out foreign currency translation remains a strong headwind as we continue to expect this to impact full year EPS by about 5 percentage points.”
–YUM! Brands (Jul. 15)

 “As of last week, the Euro was lower by approximately 17%, as compared to 2014 average levels, and the dollar has strengthened recently versus virtually all major currencies. And though we are not predicting the impact of currency movements, to give you an idea of the potential impact on sales, if currency exchange rates were to remain where they were as of last week for the balance of the year, our sales growth rate would decrease by nearly 7%, reflecting the weakening of the Euro and other major currencies against the U.S. dollar.”
–Johnson & Johnson (Jul. 14)

“Our customers have been hit hard by the strength of the U.S. dollar, most of our businesses in the U.S. and anything that impairs to manufacturing output of this country impacts us and the strong dollar has done some of that. We also sell a fair amount into Canada and that business is all denominated in the Canadian currency, so that's created some headwinds for us.”
–Fastenal (Jul. 14)

 “As you model out the third quarter, I'd ask you to consider the following: Foreign exchange translation should have an approximate 11 point unfavorable impact on the third quarter net revenue growth, and approximate 12 point unfavorable impact on third quarter core EPS growth based on current market consensus rates.”
–PepsiCo (Jul.9)

“At current exchange rates, we’d estimated $0.04 headwind to full-year adjusted diluted EPS growth in 2016.”
–General Mills (Jul. 1)

“We continued to estimate that currency will reduce our sales growth rate by 5 percentage points in 2015.”
–McCormick & Company (Jul. 1)

“Foreign exchange had a negative impact of $24mm on net sales, and about $14mm on operating profit for the [Consumer Foods] segment this fiscal quarter.”
–ConAgra (Jun.30)

“Specifically, for FY2016, we expect reported revenue growth in a mid-single-digit rate reflecting low double-digit growth on a currency-neutral basis, partially offset by the impact of the stronger dollar.”
– NIKE (Jun. 26)

“Turning now to revenues, net revenues for the quarter were $7.8B, slightly positive growth in U.S. dollars and an increase of 10% in local currency, reflecting a negative 10% foreign exchange impact compared to the negative 11% impact provided in our business outlook last quarter.”
–Accenture (Jun. 25)

“As anticipated, y-over-y Canadian currency fluctuations unfavorably impacted our comparable sales by approximately 30BPS in Q1.”
–Bed Bath & Beyond (Jun. 24)

“First, let me update you on the impact of foreign currency on Q1 results. As I previewed in Q4, nearly every currency in which we do business weakened significantly against the U.S. dollar when compared against both Q1 last year and last quarter. This significant change in exchange rates impacted not only our financial statements, but also the statistics we provide on a quarterly basis. For instance, the y-over-y foreign exchange impact on total revenue was 850BPS or $36mm headwind.”
–Red Hat (Jun. 18)

 “As you probably remember, I didn’t provide U.S. dollar guidance for Q3, given the unusually high volatility in exchange rates. The currency headwind ended up being 6% for software and cloud revenues as well as total revenue, 7% for total hardware revenue, and $0.06 per share – and $0.06 for EPS.”
– Oracle (Jun. 17)

“From a q-over-q currency perspective, FX decreased revenue by $16mm. We had $22mm in hedge gains in Q2 FY2015 vs. $24mm in hedge gains in Q1 FY2015. Thus the net sequential currency decreased to revenue considering hedging gains was $18mm. From a y-over-y currency perspective, FX decreased revenue by $48mm. Considering the $22mm in hedge gains in Q2 FY2015 vs. roughly $2mm in hedge gains in Q2 FY2014, the net y-over-y currency decrease to revenue, considering hedging gains, was $28mm.”
–Adobe Systems (Jun. 16)

“As compared to a year ago in Q3 this year, the foreign currencies where we operate weakened vs. the U.S. dollar, in fact in all countries, but primarily in Canada, Mexico, Korea and Japan, resulting in our foreign earnings in Q3 when converted into U.S. dollars being lower by about $33mm pre-tax or $0.06 per share than these earnings would have been had FX rates been flat y-over-y.”
– Costco (May 28)

“As with other international companies, the strengthening dollar has negatively impacted our U.S. dollar earnings from these operations recently.”
–AutoZone (May 26)

* * *

How ironic then that the one thing that will guarantee not only an earnings and revenue recession, but a general economic one, is precisely the event that the Fed is so desperate to engage in just to prove just stable the US recovery is, and that when the next recession finally hits the Fed will have the firepower necessary to thwart it. Supposedly because in Yellen's eyes, a 25-50 bps cut after a 25-50 bps hike is "sufficient."

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