The media spin may be shouting positive earnings, especially with Caterpillar, but a closer look below the headlines reveals a much different picture. Gold hanging in despite this week's massive capping effort at $950.

Regards - VHF

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Bizarro Market

TPC

July 21, 2009

CNBC, Bloomberg, Yahoo Finance, etc are all reporting that companies reported “better than expected” earnings this morning. Let’s take a look at these great earnings:

Coke - $8.27B in revenues vs estimates of $8.66B. A $400MM MISS.

Caterpillar - $7.98B in revenues vs estimates of $8.86B. Nearly a $1B MISS.

DuPont - $7B in revenues vs estimates of $7.15B. A $150MM MISS.

United Technologies - $13.2B vs estimates of $13.92B. A $700MM MISS.

I can’t ever remember a market where investors turned such a blind eye to top line growth. It’s truly astonishing. These are phenomenally bad revenue figures. There is just no two ways around it. This trend of rising stock prices on poor underlying earnings cannot and will not last.

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Caterpillar Earnings Are Horrifying (CAT)

Joe Weisenthal July 21, 2009, 8:19 am

Let's just get it out of the way upfront: We don't follow trading in Caterpillar (CAT) stock all that closely, so we don't know what investors were really expecting, or why shares are up 10% pre-market.

We're more like a visitor, inspecting the latest report from the politician-friendly company, and dismayed at how bad things seem to be.

The Peoria, IL-based maker of giant earth moving machines just reported Q2 revenue that fell 41%(!) from the year before. Earnings were down even more steeply, and they would've been down even more than they were had it not been for canning a whole bunch of workers -- this despite hints from its CEO that the stimulus would help it keep jobs (perhaps many of Caterpillar's workers fall into the "jobs saved" bucket that top econ advisors like Christina Romer would love to be able to count accurately).

The company was helped in the quarter -- again, a quarter in which sales were down 41% -- by the Chinese stimulus. The home front is even more of a horror show, as North American sales were down 51%, though obviously that has a lot to do with the lack of homes being built, which is a good thing.

General infrastructure was down 15%, though highway spending was flat, due to what it said was a late-quarter pickup in activity -- but how depressing is it that the only thing we know how to do is build highways now? Meanwhile, sagging demand for energy and collapsing oil prices killed their Canadian oil sands business. Again, a real nightmare all around.