The ongoing slowdown in global economic growth may finally have ended the corporate world's streak of 11 consecutive quarters of growth -- at least if early results of the third-quarter earnings seasons are any sign.
"Our results were achieved in an environment of slowing global trade and changing market dynamics,” United Parcel Service, Inc. (NYSE: UPS) CEO Scott Davis said when the Atlanta-based package deliverer announced lower quarterly profits on Tuesday.
As of the end of last week, about one in five of S&P 500 companies had reported, and FactSet gauges those companies' blended earnings growth rate at a negative 2.3 percent.
Standard & Poor's Capital IQ said in a note that it expects third-quarter earnings for the S&P 500 to come in at 0.15 percent, "the lowest expected growth rate since Q3 2009."
Here are some other big players inside and outside of the S&P 500 that have signaled a slowdown for the near future:
Caterpillar Inc. (NYSE: CAT), the giant maker of construction and mining equipment from Peoria, Ill., announced Monday it was lowering its EPS for a second time this year. It now expects $9 to $9.25 per share this year, down from the average analysts’ average expectation of $9.41. The company, whose sales are a key indicator of global performance since its equipment is used in construction, said it expected sales to be about the same next year, the slowest rate since the last recession four years ago.
Electrolux AB (ADR: ELUXY), the Swedish maker of household appliances, and Koninklijke Philips Electronics NV (AMS: PHIA), the Dutch maker of consumer electronics and lighting, both said they expected the U.S. market for home appliances to cool. Electrolux reduced its growth estimate for this segment by three basis points, from 2 percent growth to negative 1 percent. The sales rate of home appliances is an important indicator of U.S. consumer sentiment.
Both McDonald's Corporation (NYSE: MCD) and General Electric Company (NYSE: GE) rattled nerves last week as these two bellwether stocks reported disappointing earnings in the third quarter. The Oak Brook, Ill., quick-service restaurant giant doesn’t issue guidance estimations, but its same-store sales performance in recent months has sagged, and July’s was the worst in nine years. Quarterly same-stores sales, an important indicator of growth, were 1.9 percent in the third quarter, down from 6.6 percent last year. General Electric lowered its sales forecast for 2012 from 5 percent to 3 percent, citing considerable slowdown in its finance division, GE Capital.
Federal-Mogul Corporation (Nasdaq: FDML), an auto parts manufacturer based in Southfield, Mich., reported on Friday a third-quarter loss of 11 cents per share and said it would lay off hundreds by the end of the year, mostly in Europe. The company has announced it is preparing for slower growth in markets outside Europe.