S&P Earnings Reports Reveal “Revenue Recession”

New York (HedgeCo.net) – The third-quarter earnings season is almost over at this point as almost 90% of member companies have reported results. In light of the vast majority reporting already, there was a trend revealed in the results that is disturbing.

Thanks to a letter to investors from Maxwell Thacher, we learned that revenue for the S&P companies that have reported thus far is down 3.7% year over year and earnings were 2.2% lower, marking the first time since 2009 earnings were down year over year.

Maxwell Thacher runs two models on the HedgeCoVest platform, the Maxwell Thacher Global Opportunity model and the Maxwell Thacher US Equity Yield model, in addition to managing approximately $100 million through its two hedge funds, the Caisson Breakwater Global Opportunity Fund, LP and the Caisson Breakwater Fund, LP.
In the letter to investors, the firm addressed the issue of declining revenues and earnings. “These results, while not entirely representative of our holdings, clearly demonstrate that in a low growth\low interest rate global environment, companies that demonstrate the ability to grow revenues, increase margins, and retain earnings will continue to grow in this challenged global economy over the next several years.”

Rick Pendergraft
Research Analyst

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