North Texas firms are doing well, so why the pessimism?
By Maxine Shapiro, KERA 90.1 business commentator
Dallas, TX – North Texas corporate earnings started the week out with a bang. In fact, second quarter earnings for most of the high profile companies in the Metroplex were positive. So can't we just ignore a recent pessimistic survey of North Texas businesses? Wish we could. I'm Maxine Shapiro with KERA Marketplace Middays.
Texas Instruments last year, same quarter, reported a loss of $197 million, or eleven cents a share. So how did they fare for this second quarter - a profit of $95 million, or five cents a share. This week I told you about homebuilders D. R. Horton's earnings being up 54%. At Radio Shack, sales might have been lower, but profit margins were up and therefore earnings were up. Kimberly-Clark attributes their growth to "record sales volumes for training and youth pants and incontinence care products in North America and by higher shipments of consumer tissue products in every region of the world." That would be Huggies, Pull-ups, Depend and Kleenex.
Burlington Northern Santa Fe fared okay. Earnings remained pretty steady from last year. No great shakes. Hotels.com earnings skyrocket and Blockbuster profits were in line with expectations. EDS even surprised the Street with better than expected earnings. But a few analysts lowered their outlook for EDS. See, WorldCom going bankrupt might hurt EDS more than they hoped. They're one of EDS's biggest customers. And Oh, Thank Heaven For 7-Eleven. Their core earnings rose 11% from last year.
So why do 55% of some North Texas CEO's surveyed by Buston and Company believe the economic recovery is stalling? In fact, about 15% think we might be heading into a double-dip recession, because CEO's are not spending and not hiring. Most of the companies that I mentioned are consumer-driven. We ARE spending. But these companies surveyed are in a wait-and-see mode. Someone's got to BEGIN the spending - right? For KERA Marketplace Midday, I'm Maxine Shapiro.
Marketplace Midday Reports air on KERA 90.1 Monday - Friday at 1:04 P.M.