Where is the Money Going?

We are now in the heart of earnings season, here are my quickies thoughts:

Bank of America reported a strong quarter, with net income up 9.6%. Results were good in all segments. A quick survey of smaller bank earnings is not as positive, with many smaller banks reporting lower or flat earnings year over year, indicating to me the power of the big banking brands.

However, BAC continued to see bad debt rise, now at .86%, up from only .57% last year.

UPS reports this morning, should be an interesting call. UPS is at the center of the global economy and a prime beneficiary of both increasing international trade and e commerce. Unfortunately UPS also operates massive truck and aircraft fleets that burn a lot of $62 oil. Up to this point UPS has done a good job of managing fuel costs, it should be interesting to see how they do this quarter.

Pfizer reported earnings down 52%. Amgen reported a decent quarter.

Kansas City favorite Cerner has a call this afternoon, should give a good progress report regarding the move to a modern medical records system.

Finally, my pick for the random but interesting call of the day: Cash America, at 3:45. Cash America is a company that does all the financial services you hope you never need: pawn shops, cash advances, check cashing, all the things that people may want more of when banks begin to tighten up credit card standards and raise interest rates.

If big banks are starting to see more bad loans, and changing the way they calculate minimum payments, I wonder how business looks for Cash America.

Timothy Burger
timothyb(at)timothyburger.com