A CEO apologizing? It happened one and a half times today.
1) Emerson Electric CEO David N. Farr apologized for misjudging the size of the sales drop at Emerson.
2) Goldman Sachs CEO Lloyd Blankfein did not exactly apologize, but he did note that the economic crisis had been "deeply humbling," which itself was an extraordinary admission.
What's going on here with the newly humble CEO?
Call it an important tactical shift: in the case of Blankfein, by calling for a systemic risk regulator and regulation of hedge funds, by acknowledging to protestors at his lecture that public outrage against Wall Street was real, and by again saying he wanted to give back the TARP money as quickly as possible, he is getting out ahead of the curve: he is showing leadership by being among the first to act contrite, and by leading the call for reform in the financial community he will have higher standing to shape the final outcome.
Another important stock story midday:
Forget Alcoa : if you want a preview-both good and bad-of earnings season, take a look at the comments from Emerson Electric this morning, which came out after the market opened.
They are a broad industrial company-they make air cleaners, thermostats, HVAC equipment, motors, valves, hand tools, and lots of other stuff that are a good barometer of the economy.
1) They took down full year earnings guidance to $2.40-$2.60, from $2.70-$2.95 (analyst consensus is $2.47), with underlying sales declining 9 to 11 percent from 2008. The strong dollar will cut earnings by about $0.05 (half their sales are outside the U.S.).
2) "We have seen underlying demand weaken quickly as evidenced by our recent order trends," CEO David N. Farr said.
3) The stock initially rose on the news, partly because the lowered guidance is still near the consensus estimate, so the guidance actually looks pretty reasonable compared to expectations.
4) however, the stock-and the rest of the market-weakened again after 1 PM ET after the CEO said he does not see a turnaround until late 2010, early 2011 (!).
As a result, cynics say this reduced forecast is still aggressive and will likely be reduced.
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