Earnings are the amount of money that a company makes over a certain period of time, usually after taxes. So if you have a painting business for the summer, your earnings for the summer would be the amount of money that you’re left with after paying your employees, buying all the materials, and paying taxes on your profit.
Posts Tagged ‘earnings’
Earnings are…
Thursday, May 19th, 2011A Windfall Profit is…
Thursday, May 19th, 2011A windfall profit is a big profit that you don’t expect. If you own a store and make a steady amount of profit every month, you probably expect that the next month you’ll keep making the same amount.
But if one month you bring in twice as much money as you normally do, then the unusually large profit is called a windfall profit. Windfall profits are unexpected and sometimes you don’t even know why they happened!
The Power Of Playing Hard To Get: Elusive McRib Sightings, Cheap Food Boost McDonald’s Earnings
Thursday, January 27th, 2011“McDonald’s has continued to lead the fast-food industry in its recovery from the recession. It’s outpacing its rivals, such as Burger King, which was taken private in a buyout last year, andWendy’s/Arby’s Group Inc., which announced last week it is considering a sale for its lagging Arby’s chain. The fast-food giant reported a profit of $1.24 billion, or $1.16 a share, up from $1.22 billion, or $1.11 a share, a year earlier.”
What do you think?
Would you buy something (like a special molded-meat sandwich that only comes out a few times a year at select locations) just because it was rare?
Eight Months After Gulf Oil Spill, Halliburton’s Earnings Doubled
Wednesday, January 26th, 2011
credit: cjc4454
How is THAT possible? Well, the news won’t tell you everything about a company’s health. For that, we turn to our old friend the earnings report…
- Permits to drill are still hard to come by in the oily Gulf of Mexico, but increased drilling on dry land gave Halliburton a boost in the last quarter of 2010.
- The high price of oil also helped; at $90 a barrel, oil collectors had more cash on hand to expand their onshore operations.
- Halliburton is the world’s second-biggest oilfield services company, but still one of the cheaper stocks in the oil industry. Even with bigger-than-expected profits, it faces stiff competition from rivals. Oil is, after all, a finite resource.
Facts & Figures
- In the last three months of 2010, Halliburton’s revenue increased by 80%
- Net profit (the money that remains after debts and taxes are subtracted from gross profit) was $605 million in the 4th quarter, up from $243 million at the end of 2009
- In 2011, Halliburton plans to increase the number of employees working on oil projects in Iraq to 1,200
Best Quote
“It’s still the cheapest of the large-cap diversified (oilfield service) companies.” – Kurt Hallead, Analyst at RBC Capital Markets
What do you think?
What would your earnings report look like for the last quarter 2010? Would it reflect financial disasters (or successes!) from earlier in the year?
Bank Bargains? Bank Share Prices Sooooo 2009 While Other Industries Soar
Monday, January 24th, 2011
credit: Toni Birrer
Stock market investors have been enjoying the biggest rally in five years – except for investors in banks. Bank stock prices – already stuck at 2009 levels – took hits as reported earnings from last year for big banks like Citi and Goldman Sachs failed to wow.
- Each quarter, publicly-traded companies are required to report their earnings to investors. This is the time of year when we get an inside look at how different companies, industries, and economies are really doing.
- Though banks reported big profit increases, it wasn’t enough to wow (or woo) investors.
- While some investors see an opportunity, others are waiting-and-seeing.
Facts & Figures
- The last time investors could buy bank stocks at these prices was March 2009
- Back then the economy had been in a recession for about 14 months, and the S&P 500 was at a 12-year low
- But all that has changed: the 500 companies tracked by the S&P500 index gained an average of 30% in 2010
Best Quote
“What everyone is waiting for is a sign that the companies are really back, that they’re really on their feet again and can survive without continued government support and subsidy.” – John Carey, Money Manager at Pioneer Investments
What do you think?
Do these low prices make you want to invest in a bank right now? What would you need to find out before deciding? Answering these questions can help you figure out your risk tolerance, which is essential for any young investor. This will help, too.
Is Steve Jobs Worth More Than Six Billion Dollars?
Wednesday, January 19th, 2011
credit: ollesvensson
Investing is a lot about trying to predict the future of a company. But what if that future depends on one single person?
- When Apple’s CEO announced he was taking medical leave earlier this week, AAPL shares suddenly lost a lot of value. Steve Jobs is widely considered to be the secret to Apple’s success.
- But the next day, the company released an amazing first-quarter earnings report, revealing record profit from the past three months.
- The question now – without Steve Jobs on the job(s), can Apple continue to be as successful as it is today?
Facts & Figures
- Apple’s profit this quarter was $6 billion
- That’s 78% more than the same three months last year
- The company sold 16.2 million iPhones, 7.33 million iPads, and 4.1 million mac computers
- This is Jobs’ third medical leave in seven years
Best Quote
“To think of a world without Steve Jobs is a really scary thought because he has had such a major influence on all of our lives whether we know it or not.” – Gene Munster, Analyst at Piper Jaffray (an investment bank)
What do you think?
How would this week’s news that Apple CEO Steve Jobs is taking more medical leave change your decision about whether to invest in Apple?
What An Earnings Report Can Tell You
Monday, January 10th, 2011Hey, kids – it’s earnings season! That means that companies are starting to report to the world how they did in the last three months of 2010 (that is, the 4th quarter of 2010). Earnings reports are super important, whether you’re a rookie or a pro. Read on to find out why:
credit: Smudge 9000
Here’s the interesting thing about earnings reports: they give investors important information about the past and the future.
For example, overall profits are expected to be 9.8% higher than they were at the end of 2009. (Makes sense – 2009 was a pretty rough year on the economy.) But what about the years before that? Are there any companies that usually bring in 15% profit that are now earning less? Maybe 10% is their new normal. Would you be satisfied with that, as an investor, or would you prefer to find a company with a better track record?
Companies’ past earnings aren’t as important as their future earnings. Even though overall profits rose at the end of 2010, it looks like they’re not going anywhere in 2011. Why? Well, the job market hasn’t really improved. People without money can’t spend money, and companies can’t profit without money.
There are some exceptions: even though the job market is in bad shape, companies that sell luxury goods to a different market have continued to perform well. You can also predict future earnings based on new laws and tax policy. FedEx and Novellus Systems will both be taking advantage of a tax break to buy themselves new computers and cargo jets. (Those purchases not only benefit the businesses – they also increase profits for technology and airplane manufacturers.)
A little bit of bad news for companies that depend on consumer spending to boost their profits:
“…we’re not going to see sustained declines in the unemployment rate.” – Ben Bernanke, Chairman of the Fed
BMW Remains On Top
Wednesday, August 11th, 2010Second-quarter profits indicate that BMW is still the best when it comes to luxury cars makers.
- BMW’s net profit for the 2nd quarter rose to $1.1 billion, and sales rose 12.5%.
- Although the luxury car market was hit hard by the economic downturn, there has been a faster-than-expected rebound.
- The new generation 5-Series is expected to boost sales even further.
Facts & Figures
- BMW is the world’s best-selling luxury car maker, ahead of Audi and Mercedes-Benz.
- In the first 6 months of 2010, 696,026 BMW, Mini, and Rolls-Royce cars were sold.
- BMW now expects sales to rise by approximately 10% (to more than 1.4 million cars) in 2010, which is significantly more than expected at the beginning of the year.
Best Quote
“Sharp sales volume growth on major markets and a high-value model mix are the main reasons for the strong second-quarter performance. [BMW] improved efficiency significantly in all areas of the company.” – Norbert Reithofer, Cheif Executive, BMW
Ford Gives The U.S. Hope
Wednesday, August 4th, 2010Ford reports an exceptionally strong first half of 2010 and causes optimism for the U.S. auto industry.
- Ford’s second-quarter earnings were much stronger than expected and the company is on track for “solid profits” in 2010.
- Ford plans to discontinue its Mercury brand and sell Volvo to China’s Geely in the 3rd quarter because it wants to focus on mass marketing Ford and Lincoln brands.
- Ford was the only large U.S. automaker to avoid bankruptcy in 2009, and is therefore in greater debt than GM and Chrysler.
- Ford paid back 7 billion dollars of debt in the 2nd quarter (now $27.3 billion in debt) and plans to continue debt reduction.
Facts & Figures
- Second-quarter net profits were $2.6 billion, compared to $2.26 one year ago.
- Ford revenue increased by $4.5 billion to $31.3 billion.
- This is the 4th consecutive quarter that Ford has reported profits.
Best Quote
“We delivered a very strong second quarter and first half of 2010 and are ahead of where we thought we would be despite the still-challenging business conditions.” -Alan Mulally, Ford Motor Co., Chief Executive