Source: Adam Parker, Morgan Stanley


Today’s absurd datapoint comes from Slate’s Moneybox: 88% of the S&P500 earnings growth for 2012 came from just 10 firms.

Just four companies—Apple, AIG, Goldman Sachs, and Bank of America—together provided a majority of overall earnings growth among large-cap companies.


Four Companies That Together Provided Most of 2012 Earnings Growth in the S&P 500
Matthew Yglesias
Slate, Nov. 26, 2012

Category: Analysts, Earnings

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

25 Responses to “4 Companies Provided Half of SPX 2012 Earnings Growth”

  1. ConscienceofaConservative says:

    Considering the quality of earnings coming out of financial companies, which these days seem more a testament to financial engineering more than anything else…. not good.

  2. tdotz says:

    And three of the four are welfare babies – thriving from the gummint bailout.

  3. rtalcott says:

    Of those 10 only IBM and GE manufacture anything significant domestically.

  4. A says:

    And the largest change comes from a toy manufacturer.

    Just like the TSX should have capped Nortel, the Nasdaq 100 should cap Apple.

    Or exclude it.

  5. speaking of AIG..

    ~noone, still, likes to talk about this ‘give-away’..

    “…AIG is under pressure to sell off assets of the company to repay a more than $60 billion federal government bailout loan it agreed to in order to keep itself in business as it dealt with the fallout from the subprime crisis.

    HSB, headquartered in Hartford, Conn., provides machinery and plant and equipment breakdown insurance, inspection, certification and engineering consulting services.

    The deal is expected to be completed near the end of the first quarter of next year, Munich Re said, and is subject to regulatory approval in the United States, Canada and the United Kingdom.

    Munich Re said it would purchase the company utilizing internal resources that do not affect the insurer’s share buyback program.

    “This acquisition of HSB is a perfect fit for our U.S. strategy,” Peter Roder, Munich Re board member responsible for U.S. business, said in a statement. “It is another step in developing our position in high return specialized niche segments. This is one of the declared aims of our ‘Changing Gear’ program for profitable growth.” …”

    “The History of Hartford Steam Boiler

    The Hartford Steam Boiler Inspection and Insurance Company was founded on June 30, 1866. Our first president considered HSB as “the first company in America devoted primarily to industrial safety.” “Hartford Standards” quickly became the specifications for boiler design, manufacture and maintenance.

    Now, over 145 years later, those same values of loss prevention are at the forefront of much of the work we do. And, the company’s founding premise of dealing with “matters relative to everyday life” is still very much alive in the company’s culture.

    It’s not surprising, because some very unique influences and values laid the foundation upon which The Hartford Steam Boiler Inspection and Insurance Company was founded:

    Steam Power and the Industrial Revolution
    Polytechnic Club Tackles Boiler Explosions
    Insurance Incentive for Boiler Inspections

    Steam Power and the Industrial Revolution…”

    LSS: the Business Archives/Case File-history, of HSB, alone, was worth more than AIG received for the Operating Company..

  6. Theba says:

    Ditto on the depressing observation that only one of the top four of them makes anything.

  7. Jack Damn says:

    It would be interesting to see if there were other years where this type of lopsided earnings ratio occurred and how the market did the following year. Maybe there’s a long-term system, or cycle, in that particular dynamic. Or is this the most lopsided it has been historically?

    I wonder if back in GM’s “heyday” or maybe Ford (F), or US Steel (X) if they, along with a handful of companies, made up the majority of earnings for that period of time.

  8. larrr1 says:

    This is probably about the distribution every year…

  9. Ramstone says:

    Or more specifically, the distribution in years when yoy earnings of cyclicals crest.

  10. gusgus says:

    Echoing Jack Damn, how does this compare to previous years, and previous cycles?

  11. catclub says:

    The statistic is Earnings GROWTH, so if all the other stocks have high earnings, but did not grow, this year, then they count as zero. It is coming close to lying with statistics.

  12. catclub,’ll ‘Spook the Herd’..

    though, to your Point..

    the Title does Read..

    4 Companies Provided Half of 2012 Earnings Growth


    who, really, Knows. That isn’t, merely, a Chimera/Comic’s ‘throw-away’ Line (?)

    Chi·me·ra also Chi·mae·ra (k-mîr, k-)
    1. Greek Mythology A fire-breathing she-monster usually represented as a composite of a lion, goat, and serpent.
    2. An imaginary monster made up of grotesquely disparate parts.
    chi·me·ra also chi·mae·ra (k-mîr, k-)
    a. An organism, organ, or part consisting of two or more tissues of different genetic composition, produced as a result of organ transplant, grafting, or genetic engineering.
    b. A substance, such as an antibody, created from the proteins or genes of two different species.
    2. An individual who has received a transplant of genetically and immunologically different tissue.
    3. A fanciful mental illusion or fabrication.
    [Middle English chimere, Chimera, from Old French, from Latin chimaera, from Greek khimaira, chimera, she-goat; see ghei- in Indo-European roots.]

    The American Heritage® Dictionary of the English Language, Fourth Edition copyright ©2000

    though, note..

  13. Jack Damn says:

    catclub wrote:

    The statistic is Earnings GROWTH, so if all the other stocks have high earnings, but did not grow, this year, then they count as zero. It is coming close to lying with statistics.

    Ah, that’s an interesting perspective. Hadn’t thought about that.

  14. Iamthe50percent says:

    Maybe the big financial growth is because at the bottom there is no where to go but up? If last years earning were huge losses, wouldn’t normal earnings this year be spectacular growth? What’s their five year growth?

    Sure enough! A quick check at Morningstar shows BAC’s earning going from one cent to 37 cents, a spectacular growth rate of 3700%! Just look here for a quick look at this “fantastic performer”

    Does it look like a company you want to own?

  15. Iamthe50percent says:

    Check AIG, more “spectacular growth”.

    Looks like the patient died to me.

    For your amusement, use the COMPARE box to compare with T, then with VLKAY.

    AIG is a corpse.

  16. dancingdiva says:

    Amazing stat. Also amazing IBM was on the list considering their revenues declined this year. See what a big buyback and financial engineering can do?

  17. boveri says:

    WDC – Western Digital Corp. I’ll bet every one of their hard drives is made in the Orient.

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  19. dougc says:

    also consider that 14% of spx earning were 1 time write offs, up from 10% last year.

  20. Bam_Man says:

    And only one of those four companies cannot legally commit accounting fraud.

  21. Willy2 says:

    And how many of the financial companies in this list have used “creative accounting” to improve profits ?

  22. 873450 says:

    Let’s not forget 93% of income growth derived from that 88% earnings growth lands in the pocket of 1%.

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