July 19 - While most companies are beating forecasts this earnings season, when the numbers fall short- the blame game comes into play. Bobbi Rebell reports.
Most U.S. companies are making more money than expected this earnings season- and that has driven stocks to record high levels. But for those companies that miss- they have a range of excuses that they use- some valid- some not. Among the reasons for missing forecasts: the weather. Coca Cola blamed the rain- saying people just didn't drink as much soda- though they do also sell water- but even Google used the weather excuse - pointing to a warm spring in the UK on their conference call with analysts. Greencrest Capital's Max Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, GREENCREST CAPITAL (ENGLISH) SAYING: "Google had a good quarter. Less good than people expected. Better than last year. Less than people thought. And they had to come up with a story and in a sort of weaker less particularly profound moment we hear some basically shamalamadingdong about spring weather in the UK. If Google really is going to be earnings dependent on the spring weather patterns in the UK given what we all know about weather in London, I think we should all be nervous." Microsoft's finger pointing was at least in the right direction- sort of says S&P Capital IQ's Sam Stovall. SOUNDBITE: SAM STOVALL, CHIEF EQUITY STRATEGIST, STANDARD & POOR'S (ENGLISH) SAYING: "You could blame it on two letters- P.C. That basically with tablets coming into their own, the PC's really have been a big drag on these tech companies." Ok so people are buying tablets- not PC's- but Microsoft has a tablet - just not one that's selling a lot. It took a nearly billion dollar writedown tied to that. Another excuse- government cutbacks likely tied to the sequester. Verizon said most of its land line business losses were because the government was spending less. Valid says Wolff: SOUNDBITE: MAX WOLFF, CHIEF ECONOMIST, GREENCREST CAPITAL (ENGLISH) SAYING: "Look the sequester is real and we are starting to see it bite. People have a tendency to forget because it's been out of the news and it wasn't a cataclysm and the things the public really freaked out about whether those were air traffic control related those got fixed. Everything else didn't- so there is real truth here." Another real truth: Wolff says the second quarter is just a tough season- with no back to school or holiday season to drive business.