This page at CNBC titled, "Dow Earnings Season Complete" reports in no uncertain terms that Caterpillar (CAT) had a .39 profit in Q1 2009.
It's very clear. The estimate was for .04 so they are reported to have "beat" by 875%.
In fact you can find the REAL earnings data here.
Click on the "Issue Level Data" tab at the bottom and go to the row for CAT, row 83...and you'll see that Caterpillar's earnings were actually -.19 for the quarter. HOW CAN THAT BE?
CNBC has taken it upon themselves (though they certainly are not alone in this) to report operating earnings instead of reported earnings. Reported earnings are what has been used in the past and are what you would be comparing to if you wanted to perform any historical research and yet CNBC didn't even bother to mention that they were using operating earnings.
Bloomberg takes this same approach, reporting the P/E ratio of the S&P 500 as 14 or 15 when in fact it is well over 100.
Operating earnings are NOT based on Generally Accepted Accounting Principles and should only be used on an issue-by-issue basis to make judgments about an individual stock's future potential, they should not be used as EARNINGS because they are not earnings and they are not what has been used throughout history. Applying operating earnings to an entire index and then reporting the data as EARNINGS is especially egregious.
An example of operating earnings vs reported earnings: I am moving to a less expensive office in 2 months and my expenses will drop by $3,000 a month at that time. It is reasonable to deduct that cost from my reported earnings to see what my operating expenses will be going forward and to use in estimating my FUTURE profit but it is not reasonable to say that I did not have that expense of $6,000 because I did.
It's also important to note that something you will never see in operating earnings are ADDITIONS of future expenses. For instance, if I were moving to a more expensive office in 2 months you would not see that deducted from current profits. Such inconsistencies, especially when they are institutionalized as they have been for the past decade or two, have always been reversed during a long bear market periods in the stock market to adjust for the intitutionalized lies that we have gotten used to telling oursleves.
In my opinion, CNBC and Bloomberg are shilling the market and the consequences have been, and will be, devastating as the stock market finds a way to return to a reasonable value regardless of what Bloomberg and CNBC can convince the public of. By the way, none of this could happen without the public accepting it. But I also blame you if you don't do the research that any investor should be doing. In the past decade and over the coming years, you, if you are one of those accepting such obviously bad data, have and will get burned again and again and each time it happens I suggest you look in the mirror when you are looking for someone to blame.
The real data is out there and easier than ever to find; go find it and put it in context or suffer the consequences of ignorance.
