Wall Street to CEOS: Show me the revenue

NEW YORK In its best Jerry Maguire impersonation, Wall Street has a key message for Corporate America this earnings season: Show me the sales! Show me the revenue! Good news on earnings related to cost-cutting and worker productivity won’t cut it when it comes to grading a company’s thirdquarter profit performance.

A sales squeeze is the main storyline of a disappointing start to the profit reporting season. While six of 10 companies in the Standard & Poor’s 500-stock index have beaten earnings-per-share targets — just shy of the 62% historical average — revenue misses have been plentiful. Only 39% of the 123 S&P 500 companies that have reported results have topped analyst revenue estimates, far below the 62% that normally beat, Thomson Reuters data show. Overall, revenue is on track to fall 0.4%, a fifth straight quarterly decline.

“The data reinforce concerns that demand in the economy is weak,” says Gregory Harrison, analyst at Thomson Reuters. The latest revenue shortfalls came Monday from heavy equipment maker Caterpillar and toymaker Hasbro. That follows last week’s misses from search engine Google and tech titan IBM. Companies are spreading the blame around. Some are pointing the finger at China, where growth is slowing. Europe, due to its debt woes, is also on the list of excuses. U.S. consumers are also to blame, as they’re buying fewer toys and burritos. Smartphones have also been fingered, as tech firms get less ad dollars from smaller digital screens.