Goldman Sachs Beige Book on Q1 Earnings Calls – ValueWalk Premium
Goldman Sachs Beige Book

Goldman Sachs Beige Book on Q1 Earnings Calls

Goldman Sachs Beige Book on Q1, see Goldman Sachs beige book on Q412 earnings here. Below is a brief summary from goldman followed by the full document in scribd.

Goldman Sachs Beige Book

Goldman Sachs Beige Book

The Summary of Commentary on Economic Conditions, commonly known as the “Beige Book,” is published by the Federal Reserve eight times per year. In it, the 12 regional Reserve branches offer anecdotal evidence on the current economic environment in their respective regions based on interviews with key business contacts, economists, market experts, and other sources.

In our quarterly Beige Book publication, we review the earnings transcripts of companies in the S&P 500 to monitor the anecdotal evidence of fundamental and thematic trends. This quarter’s report contains excerpts from 79 companies that account for 32% of total S&P 500 revenues and comprise 40% of the S&P 500 equity capitalization.

All management comments on the following pages were taken verbatim from company transcripts as recorded by Call Street and accessed via FactSet. All company data are as of May 3, 2013. We highlight three major themes from 1Q 2013 earnings commentary:

Goldman Sachs Beige Book Theme 1: Low inflation and stronger pricing support margins

Stable or reduced input costs and the ability to hold or take pricing were often the basis for a positive margin outlook. Sharply reduced commodity prices and restrained intermediate goods inflation drove cost containment. Meanwhile, managements divided into two camps on pricing. Some noted competitive discounting had dissipated leading to more rational pricing supportive of stable operations. Alternatively, others reported concrete pricing gains driven by better economic activity generally, tightening of supply in niche areas, and an ability to demand premium prices for higher quality or innovative goods and services. Selected examples: AA, GLW, FAST, GIS, COST, MCD, UTX, SLB, GWW, CMA, UNH, CSX, FDX, JNJ, XOM, WYN, DRI and LEN.

Goldman Sachs Beige Book- Theme 2: Global growth challenged but structural promise exists

First, managements identified less distress in European operations while also emphasizing a zero or low growth outlook over the medium term. Second, companies weighed the FX impact of yen weakening against the promise of an invigorated Japanese market. Third, while affirming Chinese growth had slowed, many firms remain enamored with its market size and high relative growth. As expected, the challenges of developed markets continue to heighten the appeal of emerging markets both in the BRICs and beyond. Selected examples: EBAY, DOV, UTX, WYN, HON, CL, KO, MMM, LLY, AFL, GLW, NKE, FCX, DD TMO, PG, XOM, PLD, YUM and MCD.

Goldman Sachs Beige Book Theme 3: Impact of the sequester and higher payroll taxes mixed

Some consumer facing firms cited a clear shift in spending patterns due to delayed tax rebates and signs of structural weakness from consumers particularly impacted by the payroll tax increase. Separately, select government contractors noted a drop in activity at the federal, state and local levels for both new and existing business. Notably, managements shifted emphasis away from broad statements about regulatory uncertainty and its impact on business activity towards addressing the concrete impact of known policy measures. Companies disagreed about their ability to accurately measure the impact of government austerity on operations. Selected examples: UNH, ABC, GE, UTX, GWW, VZ, T, AZO, DRI, IBM, FDO, SO, KO, D and AET.

Further reading- GREED & fear: China, Hong Kong Data Discrepancy Highly Suspicious

Goldman Sachs Beige Book Q1 by


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