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Economic Outlook: Corporations make a move

By ANTHONY HALL, United Press International   |   April 27, 2012 at 8:29 AM
Corporate reports kept U.S. stock markets humming this week.

Microsoft, IBM, Chrysler and Apple posted strong numbers in their quarterly reports, the latter two showing surprising gains.

Chrysler reported a profit of $474 million, more than four times its earnings in the same quarter a year earlier. Apple Inc. said revenues soared to $39.2 billion and quarterly net profit hit $11.6 billion, nearly double last year's $6 billion profit from January through March.

Tellingly, international sales accounted for 64 percent of the quarter's revenue and there is no end in sight for the popularity of tablet devices, a mainstay in Apple's repertoire.

With numbers that are nothing short of staggering, Apple said it sold 35 million iPhones and 12 million iPads in the first quarter. But then there are more staggering numbers ahead.

Futuresource Consulting, an independent research firm, said global tablet sales would hit 232 million by 2016 with a 200 percent increase in the United States and Europe.

What had been 13 million consumers using a tablet at least once a month has jumped to 75.6 million, eMarketer said.

The corner bookstore is headed for museum status. By 2016, researchers predict, 70 percent of all book sales will be in digital form. Welcome to tomorrow.

Given all the above, one might expect that every other person walking down Main Street would be carrying a tablet.

One might expect Apple would be applying for permission to build a factory in your hometown.

But that's not the case quite yet. Apple produced huge sales gains in China in the first quarter and, The Wall Street Journal reported Friday, jobs are on the way. They're just not on their way to the United States.

Analyzing corporate reports, the Journal said 35 huge U.S. corporations beat other U.S. employers in the pace of hiring in the past two years -- utterly stunning news given Labor Department reports that, month after month, show small businesses adding the huge majority of U.S. jobs while mid-sized firms have added considerably less. Firms with more than 500 employees have added a negligible number of U.S. jobs.

Seventy-five percent of the jobs added by multinational corporations were overseas, the Journal said.

Let's name names. In 2009-2011, the size of payrolls at Walmart Stores Inc., International Paper Co., Honeywell International Inc. and United Parcel Service Inc. grew 3.1 percent on the addition of 113,000 jobs, the Journal said.

But overseas, they added 333,000 jobs in the same period.

Walmart, to focus on one firm, hired an additional 100,000 workers in 2011, but the size of its payroll has been stagnant in the United States since 2007.

The moral of the story is clear. Spelled out by UPS spokesman Norman Black: "This is a business you can only go so far with technology. At a certain point, when volume starts to climb, we do add people," he said.

With all those tablets to deliver, a UPS prerequisite for many drivers may be the ability to read road signs in Chinese.

In international markets Friday, the Nikkei 225 index in Japan shed 0.43 percent and the Shanghai composite index in China lost 0.35 percent. The Hang Seng index in Hong Kong lost 0.33 percent and the Sensex in India was flat, up 0.02 percent.

The S&P/ASX 200 in Australia gave up 0.19 percent.

In midday trading in Europe, the FTSE 100 index in Britain rose 0.22 percent while the DAX 30 in Germany rose 0.13 percent. The CAC 40 in France added 0.43 percent and the Stoxx Europe 600 rose 0.32 percent.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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