A Second Look at Fourth Quarter Earnings

We continue to examine the results achieved by public corporations during the fourth quarter of 2008.

GCFR has already posted evaluations of the financial statements issued by:

• Automatic Data Processing (NASDAQ: ADP) - GCFR analysis and Update
• BP p.l.c. (NYSE: BP) - GCFR analysis
• Broadridge Financial Solutions (NYSE: BR) - GCFR analysis
• ConocoPhillips (NYSE: COP) - GCFR analysis
• Cisco Systems (NASDAQ: CSCO) - GCFR analysis and Update
  
• Intel (NASDAQ: INTC) - GCFR analysis
• Microsoft (NASDAQ: MSFT) - GCFR analysis
• Nokia (NYSE: NOK) - GCFR analysis
• NVIDIA (NASDAQ: NVDA) - GCFR analysis
• PepsiCo (NYSE: PEP) - GCFR analysis
• Tidewater Inc. (NYSE: TDW) - GCFR analysis
• Wal-Mart Stores, Inc. (NYSE: WMT) - GCFR analysis
  
• Watson Pharmaceuticals, Inc. (NYSE: WPI) - GCFR analysis
  

We use the following table as a scorecard to look for trends in the unscientific sample of companies we follow.

Company	Net Income Compared to Q/E Dec 2007	Net Income Compared to GCFR Estimate	Overall Gauge Score (100 = max)	Gauge Increasing the Most	Gauge Decreasing the Most
ADP	+3.0%	+4.5%	55	None	Cash Mgt
BP	-176%	-165%	65	None	Growth
Broadridge Financial	+3.5%	+9.9%	53	Value	None
Cisco Systems	-27%	-6.9%	66	Value	Profitability
ConocoPhillips	-827%	-1075%	43	Profitability	Growth
Intel	-89.7%	-4.9%	47	Cash Mgt	Growth
Microsoft	-11.3%	-11.7%	68	Value	Growth
Nokia	-68.6%	-58.6%	38	None	Value
NVIDIA	-157%	-76%	25	None	Value
PepsiCo	-43.0%	-50%	47	Value	Growth
Tidewater	+30.9%	+33.9%	56	Value	None
Wal-Mart	-7.4%	-0.4%	42	Value	Growth
Watson Pharmaceuticals	+46.8%	+11.9%	56	Growth	Profitability

Companies in varied industries added big charges onto weak operating results to produce huge losses that we failed to forecast.  Tidewater has been, to date, the best surprise of the quarter.  It seems ironic, given current circumstances in its industry, that Broadridge Financial was also better than expected. 

It's an indicator of the times that none of the gauge scores increased for several companies and that the contrarian Value gauge was the one most like to move up significantly.

Similarly, it's no surprise that the Growth gauge is the one most likely to have taken a tumble.


Of the many companies that will report earnings during the week of 23 February 2009, we have posted "look-aheads" for The Home Depot, Inc. (NYSE: HD) - Look Ahead (revised after the company announced it will discontinue its EXPO Design Center business) and King Pharmaceuticals (NYSE: KG) - Look Ahead.