Latest Q2 Earnings Reports Bear Market Rally Not Sustainable
By Sustainable Virtual Copywriting Services

This week the Obama administration told the visiting Chinese “don’t expect the U.S. consumers deeply in debt to lead any global economic recovery”. Further evidence supported by today’s Q2 earnings reports include;

United States Steel Corp. (X) reported today it lost $392 million during its second quarter as the global recession continued to weigh down demand for the metal. The steelmaker is also forecasting an operating loss for the third quarter. The Pittsburgh-based company's loss amounts to $2.92 per share and reflects an industry wide slump that began late last year, when demand plunged with the broader economy. U.S. Steel says it earned $668 million, or $5.65 per share, in the year-earlier period.

Industrial-parts maker Rockwell Automation Inc. (ROK) reports today its fiscal third-quarter income plunged 79 percent amid a sales decline at both business divisions, but its profit beat Wall Street expectations. The company said earnings fell to $32.8 million, or 23 cents per share, for the quarter ended June 30. That's compared with $152.6 million, or $1.03 per share. Revenue at its architecture and software division fell 36 percent. At its larger control products and solutions unit, sales fell 28 percent -- a steeper-than-expected decline.

Truck maker Paccar Inc. (PCAR) on reported today its second-quarter profit tumbled 92 percent as the weak economy hurt freight shipments and truck sales. Earnings for the quarter ended June 30 fell to $26.5 million, or 7 cents per share, from $313.5 million, or 86 cents per share, in the same quarter last year. Revenue dropped 58 percent to $1.6 billion from $3.78 billion.

Valero Energy Corp. (VLO) , the nation's largest independent oil refiner reported today it lost $254 million in the second quarter as lower margins and weak demand for gasoline and other refined products hammered results. San Antonio-based Valero said net income for the April-June period amounted to a loss of 48 cents per share. In the second quarter a year ago, Valero earned $734 million, or $1.37 per share. Revenue fell 51 percent to $17.9 billion from a year ago.

Grocery chain Supervalu Inc. (SVU) reported today that its fiscal first-quarter profit dropped 30 percent as sales and profit margins softened as it cut prices and spent more on promotions. The grocery chain's adjusted results managed to top analysts' estimates, but the company cut its full-year adjusted profit guidance on the likelihood that consumer spending would continue to be squeezed. The operator of stores such as Albertsons, Save-A-Lot and Farm Fresh earned $113 million, or 53 cents per share, for the period ended June 20. That's down from $162 million, or 76 cents per share, a year earlier.

Today analysts, on average, expect Cablevision (CVC) to report earn 29 cents per share, down from 34 cents per share a year ago, according to a survey by Thomson Reuters. Analysts also were forecasting revenue of $1.87 billion from last year's $1.7 billion. The net subscriber is expected to report growth falling by 50 to 60 percent in the quarter from a year ago. But investors will be heartened by growth in revenue and earnings, before interest, taxes, depreciation and amortization.

MSA (MSA) today announced that net sales for the second quarter of 2009 were $227.2 million compared with $293.2 million for the second quarter of 2008, a decrease of $66.0 million, or 22 percent. Net income for the second quarter of 2009 was $12.5 million, or 35 cents per basic share, a decrease of $7.5 million, or 38 percent, compared with $20.0 million, or 56 cents per basic share, for the same quarter last year.

Viacom Inc. (VIA-B) reported today its second-quarter profit tumbled 32 percent as revenue fell amid a weak advertising market, slower video game sales and lower box-office results. The New York-based media conglomerate controlled by billionaire Sumner Redstone earned $277 million, or 46 cents per share, compared with $407 million, or 65 cents per share, in the same quarter last year. Excluding 3 cents per share in severance charges, adjusted earnings were 49 cents per share in the latest quarter.

Conclusion
Given the mostly poor earnings reports for Q2 in June - July; the market cannot sustain current DOW levels of 9,000 based on the actual data particularly with any flat “L” shaped U.S. “recovery”. Prepare defensive portfolio to weather the coming reality check with eye on emerging growth markets.

Disclosure: The Author is the CEO of SVS offering new media content, web development and copywriting within a wide range of sectors including sustainable industries, healthcare, clean technology and innovation entrepreneurship. For more information visit www.sustainablevirtualbiz.com or call (503) 621-4953.