Dow Companies Report Worst Revenues Since 2010, Dow Rises to 20,000
From January 2011 to January 2017, the DJIA has soared 73%, from 11,577 to 20,094. But when it comes to revenues of the 30 Dow component companies, the picture turns grim.
Recently, Richter was asked about the revenues of all Dow components. Charts show total aggregate revenues as reported under GAAP by the 30 companies that are in the DJIA today. For 2016, these 30 companies reported aggregate revenues of $2.69 trillion, down 4.4% from 2011 and the worst year since 2010.
Of the 30 companies in the Dow, 15 sported declining revenues in 2016, and 16 sported declining revenues over the 2-year span since 2014.
But the stock market is full of hocus pocus, and actual revenues are obscured in the best way possible. So when Richter brings up revenues, everyone says, “Who cares about revenues?”
“OK, I get it,” says Richter. “It’s all about the adjusted ex-bad-items earnings-per-share—the Great American fiction—along with ‘leveraged share buybacks’ funded with borrowed money, other forms of adroit financial engineering, and crowd-pleasing new metrics.”
This relentless focus on Wall Street hocus pocus explains in part why the DJIA has soared 73% over 5 years to 20,000, even as aggregate revenues have been mired in a sea of stagnation.