SRE Beats On Bottom Line; Misses On Top Line -- November 2, 2016

Sempra Energy:

• Q3 EPS of $1.02 beats by $0.06. 
• Revenue of $2.54B (+2.4% Y/Y) misses by $140M.

Press release here.

The New York Times. Meanwhile, The New York Times: quarterly profit drops almost 100%.  Ads drying up.

The New York Times Co reported a 95.7 fall in quarterly profit, hit by restructuring charges related to headcount reductions.

Net profit attributable to the newspaper publisher fell to $406,000, or break-even per share, in the third quarter, from $9.4 million, or 6 cents per share, a year earlier.

Revenue fell to $363.6 million from $367.4 million. 

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Markets Worldwide Dropping

That's the headline: equity markets dropping worldwide.

The analysis: "Trump is gaining and world markets don't like it." That's the headline over at Yahoo!Finance.

So, let's think about that.

WHAT'S MORE LIKELY?

Traders pulling their money out of the market because Trump might be sworn in as president 75 days from now and whatever he is able to do won't take effect for months after that, with the assumption that what he does in his first 100 days has negative impacts on the economy a year from now. Traders pulling money out of the market this week because of something that might possibly happen a year from now?

OR

Saudi Arabia selling $8 billion worth of securities this month and every month going forward to make payroll. (I mentioned that the other day. See this post.)

If markets are tumbling "due" to the Trump effect, this is simply an "event"/"excuse" to take profits.

If markets are tumbling "due" to Saudi selling securities to meet payroll it gives one an idea how serious the oil crisis is for OPEC.

BY THE WAY

An analysis suggesting this is due to the "Trump" factor is not a bit surprising. The mainstream media has used "everything" to scare folks about voting for Trump. Scaring investors about a Trump victory is nothing different. So the real question is this: is the analysis ("the market slump is due to Trump) a rational economic analysis or simply propaganda to help Hillary? 

By the way, how is oil doing today? Down almost another dollar, now down below $46, the low end of the sweet spot for the price of oil in the US. [Update, mid-morning trading: WTI is down over 3%; down a $1.55; nearing $45. Could it break below $45? Enquiring minds want to know.]

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Can You Hear Me Now?

In "medicine," there are three branches: medical, surgery, and psychiatric.

The three branches attract different personalities.

Those going into surgery will see the results of their efforts measured in seconds, minutes, hours, or days (think: stents to save a heart attack victim).

Those going into medicine may not see the results of their efforts for days, weeks, months, or years (think: prescribing statins to prevent a heart attack).

Those going into psychiatry may not see the results of their efforts for months or years (psychotropic drugs generally take at least one month to begin to take effect).


That would be the same in business and investing. Actions have consequences, but some consequences take longer to be revealed.

I thought of that when I saw the headline today: Iranian minister says Boeing's huge deal with Iran Air to be finalized within days. Story here.

Boeing and Iran are "within days" of finalizing the details of Iran Air's massive order for 80 aircraft after it was approved by the U.S. government last month.

Those who made the decision to end/ease Iranian sanctions are seeing the effects (almost immediately) of that decision.

There may be a lot of ink used in all the stories about sanctions and about the US-Iranian relationship and what-ifs and who's right and who's wrong, but it's amazing how politics can really lead to cognitive dissonance. Something tells me that all the folks upset about Obama ending/easing sanctions are more than thrilled if they are investors in Boeing, or if they are blue collar Boeing employees. One wonders if Obama's biggest problem was his ability to communicate.

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Jet Propulsion Laboratory (JPL)

I think I grew up with JPL in the back of my mind -- at least during my coming-of-age years. There is really something "romantic" or intriguing or inviting about southern California, Pasadena, Colorado Boulevard, Big Bob's, Mount Baldy, California Institute of Technology, and so on and so on. Chemistry was my favorite subject in high school and had I grown up somewhere other than Williston, ND, it's hard to say what might have happened.

So, it's quite fascinating to read about the "origin" of the JPL.

I happened to read about it in Nathalia Holt's 2016 book on "Rocket Girls." I take notes on the book over at this post:

These are my abbreviated notes of the first few pages.

Begins in 1939

• Suicide Squad: began with three young men. Out of Pasadena; tinkering with homemade rockets, while one or two were students at Caltech. Worked in the Guggenheim Aeronautical Laboratory
• Barby, incredibly bright, fitting in classes at Occidental College
• 1939: National Academy of Sciences awards a grant to the Suicide Squad, now known as the GALCIT (Guggenhiem Aeronautical Laboratory at the California Institute of Technology)
• first year: $1,000
• second year: $10,000
• US government's first investment in rocket research
• in deference to Army Air Corps, they changed their name to Air Corps Jet Propulsion Research Project
• the group approached Richard and Barby Canright about being the mathematicians for the group