Economic Trends In Transportation Industry

Would you expect an earning announcement by one firm within an industry to impact on the share prices of other firms in the industry? Why?

When analysts question a firm’s earnings quality, it raises concerns regarding under or over aggressive accounting practices that may be allowing the firm to manipulate the earnings. Earnings quality is defined as the strength of the current earnings in being used to predict future earnings and cash flows. Since earning quality is indicative of future performance, analysts are more likely to address issues that have substantial impact on the earnings quality. An issue arises when the nature of the earnings is questioned. While permanent earnings are part of normal operations, any irregular, one time earnings can skew the earnings, making the firm look more profitable than it is. This is due to the inability to recreate similar one-time transactions that will give rise to such numbers. Investors prefer predictable

Honeywell was able to meet its Q4 earnings target of 2008 but the investors were becoming more leery. Although

Such an intense focus has been placed on quarterly earnings as an indication of a company’s success by everyone from analysts to executives that ethics have for the most part been thrown out the window, sacrificed to the all important number, i.e. earnings per share. This is the theory in Alex Berenson’s book “The Number: How the Drive for Quarterly Earnings Corrupted Wall Street and Corporate America.” This number has become part of a game to be played, a figure to be manipulated – beat the number and Wall Street all but throws a parade, miss it and a company’s stock may be abandoned. Take into account the incentives that executives have to beat the number and one can find plenty of reasons to manage earnings.

The energy industry is not any different than most commodity-based industries as it faces long periods of boom and bust. Drilling and other service firms are highly dependent on the price and demand for petroleum. These firms are some of the first to feel the effects of increased or decreased spending. If oil prices rise, it takes time for petroleum companies to size up land, setup rigs, take out the oil, transport it and refine it before the oil company sees any profit. On the other hand, oil services and drilling

The Trucking Industry is a vital component of commerce in the United States largely because such a huge portion of all the goods transported in the United States moves by truck. “68.5 percent of all the freight transportation tonnage moved in the United States according to Costello, B. (2013); and trucking accounts for 84 percent of all revenue spent moving freight in the transportation industry according to Bennett, A. (2010). Truck drivers facilitate one of the modes in intermodal transportation that has in effect created a spatial bridge across the United States. “Trucks are the only mode of freight transport that services 100 percent of the communities in America, with 80 percent

Earnings performance appears satisfactory and trending upward. Earnings were positive as of the three reporting periods and were sufficient to cover operations, fund loss reserve accounts, and augment capital. Reported Net Income increased from $173,959,000 as of December 31, 2014, to $253,404,000 as of December 31, 2015, and to $361,824,000 as of December 31, 2016. This increase is due mainly to an increase in Net

Now that the three weeks have ended my final earnings is negative $392. 72. I lost money from the past three weeks from the stock market project. Honestly, I was not surprised of my results. I did not take the time to research into my chosen stocks. Comparing to the Dow Jones Industrial Average I don't come nearly close to it. The Dow Jones is known to range from $17,000. My earnings is negative compared to the positive of the Dow Jones. This has taught me something if I possibly invest in the stock market in the future.

Baruch Lev and Feng Gu authors of “The End of Accounting and The Path Forward for Investors and Managers” indicate that over the past 110 years, the structure and content of financial reports has not changed, and that the role that these reports play in influencing the decisions of investors has greatly diminished. Lev and Gu make a case that non-transaction events that are not captured by the financial reports such as those disclosed through 8-k filings with the Securities and Exchange Commission (“SEC”) have a greater impact on stock prices, and thus more useful to investors. In addition, they suggest that one of reasons for the decline in usefulness of financial reports stems from the increase of estimates that has made its way into these reports (Lev and Gu 2016).

Throughout the development of the United States and its economy, transportation has been the catalyst as well as sometimes the prohibitor of growth from industry to industry and region to region. As supply chains have become more globalized, so has the need for a more efficient and accessible transportation infrastructure within the country to allow greater access to newer markets overseas. By having such a crucial role in U.S commerce over the years, there has been fluctuations in the amount of regulation drawn up by the government and enforced by federal agencies and the courts. In this case, the railroad, trucking and air industry’s have reflected the national trends of regulation and deregulation movements over the last 15 years.

Brandt Cornell research paper : “Is the response of analyst to information consistent with fundamental valuation?” suggests that one week after press release :

But the energy industry has seen its fortunes go down, as global crude oil prices has continued to sink. While cost of crude

Jim Cramer called out to investors to be wary this week since it will be the period when several earnings announcements will be made. The financial guru pointed out that the news will be littered with haphazard headlines that claim to describe a company’s performance for a particular quarter and a single mistake can cause investors millions. CNBC shares Jim Cramer's insight on rolling the dice as an investment

In the underlying paper the author re-examines the conservatism principle and its asymmetric effects on earnings. With samples consisting of all firm-year observations from 1963 to 1990 with returns data on the CRSP NYSE/AMEX Monthly files and respective accounting data on the COMPUSTAT Annual Industrial and Research files, he formulates and tests four major hypotheses to find evidence for his predictions. At first he chracterizes “conservatism in accounting as the more timely recognition in earnings of bad news regarding future cash flows than good news”.1 In his first hypothesis he predicts a more sensitive response of earnings towards bad news in comparison to good news, proxied by negative and positve annual stock returns. His second prediction is that earnings are more timely than cash flow, indicating a stronger association of accruals to conservative accounting effects. Hypotheses three and four account for a test on the

earnings, but on the public as a whole. First, we were presented with a shocking