S&P 500 Sectors — Foreign Revenue as a Percentage of Total Revenue

Discussion in 'Stocks' started by ASusilovic, Oct 28, 2009.

  1. [​IMG]

    As companies extend operations across the globe, the traditional idea of U.S. domestic investing also may be changing. Global expansion is beginning to represent a material portion of U.S. domestic company total revenue. As illustrated in the chart above, revenue from non-U.S. operations represents 36% of total revenue. Each S&P 500 sector carries differing indirect foreign exposure, led by energy and information technology respectively. It appears that indirect foreign exposure is one factor to consider even when investing in U.S. domestic equities.

    As with all investing there are risks associated. International investing carries other risks such as currency, political, and the volatility of investing in emerging markets. As the world becomes smaller economic ripples have a broader impact as evidenced by European exposure to the U.S. subprime fallout. Nevertheless, as indicated by last week’s and this week’s chart, international investing has been increasing over the last three years and a large portion of S&P 500 companies are investing abroad.


    US: Positive revenue growth just around the corner

    Tue, Oct 27 2009, 09:54 GMT
    by Economic and Strategy Team

    National Bank of Canada

    The current earnings season is nothing short of stellar: so far 81% of the first 199 S&P 500 companies to report earnings came in above expectations on their thirdquarter 2009 results. But this time around, we are also interested by the top line. We have previously said it was a good thing that U.S. companies were busy cutting costs. This made them more productive. But cost-cutting alone will not produce a sustainable economic recovery.

    Top-line growth is needed if employment is to grow down the road. Companies are now lean. Profit margins of nonfinancial companies are now at 10%, which is pretty high for the end of a recession. Any uptick in sales will give bottom lines a big boost. The blended Q3 revenue growth rate (combines actual numbers for companies that have reported and estimates for companies that have yet to report) for the S&P 500 is −10.2%. But so far in the quarter, quarterly revenues have declined only 2.5%. According to the consensus, positive revenue growth is just around the corner: Q4 sales for the S&P 500 are expected to be up 4.7%.Further down the road, revenue growth is expected to remain in positive territory.

    It should be noted that the average expected quarterly revenue growth between Q4-09 and 2011 is seen at 6.6%. This is lower than the 2005-08 average of 9.6%.

    This is consistent with our economic scenario which sees upcoming economic growth below last cycle’s trend.