Client: What would it take for you to change your view?
Me: Revenue growth.
- Conversation, December 2009
After reviewing 4th quarter earnings, the conclusion is undeniable: There has been a surge in business activity over the last six months which is reflected in companies' top and bottom lines.
Take a look at the following data for the S&P 500 as a whole:
Period / Operating EPS
4Q09 (88%)* $17.34
3Q09 $15.78
2Q09 $13.81
1Q09 $10.11
4Q08 -$00.09
3Q08 $15.96
2Q08 $17.02
1Q08 $16.62
4Q07 $15.22
3Q07 $20.87
2Q07 $24.06
1Q07 $22.39
Now take a look at the data from an index I created of four of the biggest tech companies in the world (Hewlett Packard (HPQ), Intel (INTC), Cisco (CSCO) and EMC (EMC)) with a combined market cap in excess of $400 billion:
Big Tech Index | ||||
Period | Revenues** | % Change | Net | % Change |
4Q 2009 | $45,046 | 14.1% | $8,795 | 56.3% |
3Q 2009 | $41,875 | -11.5% | $7,216 | -5.2% |
2Q 2009 | $37,112 | -17.2% | $5,486 | -17.9% |
1Q 2009 | $35,494 | -20.5% | $4,827 | -25.1% |
4Q 2008 | $39,477 | -15.2% | $5,627 | -26.1% |
3Q 2008 | $47,314 | 18.6% | $7,615 | 7.7% |
2Q 2008 | $44,798 | 23.9% | $6,678 | 13.4% |
1Q 2008 | $44,656 | 24.6% | $6,441 | 6.9% |
4Q 2007 | $46,564 | 28.2% | $7,609 | 28.4% |
3Q 2007 | $39,884 | 16.8% | $7,074 | 28.2% |
2Q 2007 | $36,152 | 16.4% | $5,889 | |
1Q 2007 | $35,830 | 12.3% | $6,026 | |
4Q 2006 | $36,314 | $5,926 | ||
3Q 2006 | $34,145 | $5,517 | ||
2Q 2006 | $31,069 | |||
1Q 2006 | $31,908 | |||
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