3 Trends This Earnings Season

Halfway through Q1 earnings, there's already a clear pattern emerging: 1) revenues sometimes a tad light, 2) rising fuel/commodity costs and poor weather are widely cited as an impact on margins and the bottom line, and 3) sales outside the U.S., particularly to developing countries, continue to become a more important part of topline growth.

Look at UPS , which this morning reported diluted earnings per share of $0.88, slightly better than the $0.85 consensus, better than the $0.71 from a year earlier. Revenues of $12.58 billion were slightly lighter than consensus. The company cited rapidly rising fuel costs, and the challenging weather condition as headwinds. Despite the revenue miss, they're at $4.15-$4.40, prior guidance was $4.12-$4.35, consensus $4.25.

Silver: a correction, of sorts. I noted yesterday that silver stocks were down 3 percent or more, on a day when silver hit new highs...but Monday night silver too came down as the CME reportedly raised margin calls on silver. BMO made a very good valuation call on Silver Wheaton , downgrading it yesterday purely on valuation.


1) 3M beats ($1.49 vs. $1.45 consensus) and raises guidance for the full year, to $6.05-$6.25 from prior guidance of $5.95-$6.20 (consensus $6.22). Organic volume was up 8.9 percent.

2) If you want to see the impact of overseas sales on U.S. companies, look at truck engine producer Cummins up 3 percent pre-open, reported a blow-out quarter: $1.75 vs. $1.44 consensus, on strong international sales, and even the North American truck market appeared stronger. Sales were up 56 percent (!): up 66 percent in China, 39 percent in Brazil. Sales outside the U.S. are now almost two-thirds of revenue.

3) Ford rises 2 percent after reporting much better-than-expected earnings($0.61 vs. $0.50 consensus). The automaker got a boost from "strong performance in North America and solid improvement in Europe" as volumes and pricing improved. Full-year industry volumes are seen between 13-13.5 million vehicles. CEO Alan Mulally expects the firm's annual volumes to continue growing "substantially" and the automaker expects to sustain or improve its market share.

4) Illinois Tool Works rises 6 percent after earnings easily beat estimates ($0.91 vs. $0.84 consensus). The industrial product manufacturer saw stronger-than-expected revenues on solid double-digit gains in organic sales. Demand continued to pick up, and CEO David Speer expects most of its end markets "will remain relatively strong throughout the remainder of 2011." The company raises its full-year earnings outlook and expects mid-to-high double-digit revenue growth.


5) Coach earnings beat estimates($0.62 vs. $0.60 consensus) propelled by strong sales, particularly in North America where comps rose 10 percent. The high-end accessory retailer was impacted by the Japan earthquake, which negatively impacted earnings by 2.5 cents per share last quarter, and will have a similar impact in its current quarter. The company also boosted its dividend by 50 percent to $0.90.

6) Coca-Cola $0.86, a penny short, revenues also a bit short of consensus, worldwide volume up a strong 6 percent. North America volume growth was also 6 percent, that is particularly noteworthy.

7) Strong pre-Easter sales helped Hershey top estimates ($0.72 vs. $0.70 consensus) as margins grew slightly despite "significantly higher" input costs. Sales rose 11 percent in the quarter on improved volumes. The candy maker now sees 2011 sales and earnings at the high end of its prior outlook (but earnings guidance $2.70-$2.76 still below $2.78 consensus).

8) Humana pre-announced earnings above expectations, raised its full year outlook, and said it will begin paying a dividend.

9) AK Steel up fractionally on light volume as Steve Cohen's SAC Capital filed a Schedule 13G showing it owned a 5.3 percent stake in the company.

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