Bush Inc. Releases Quarterly Earnings Report

By Daniel Kurtzman, AlterNet. Posted August 14, 2001.

WASHINGTON -- Shares of Bush Inc. (NYSE: SHRUB) moved higher today after the company reported second-quarter results that beat analysts' low expectations, with strength in its energy businesses offsetting weakness in its intelligence and communications divisions.

Bush Inc., corporate America's leading financial service provider, reported a record increase in income, fueled by a $1.35 trillion tax cut that is expected to provide a hefty dividend to the company's shareholders for years to come.

Skyrocketing gasoline and wholesale energy prices also helped the company post strong gains in its core businesses. Those gains helped the company overcome steep losses in its Arctic and European ventures, as well as a crisis in consumer confidence created by management's controversial decision to give its top corporate investors control over company policy.

The company's stock, which has fallen out of favor in recent months after trading at an all-time high at the end of April, rebounded on today's earnings announcement. The stock had been faltering ever since the company's chairman, George W. Bush, made a series of confusing, nonsensical public statements that left analysts wondering whether he had a coherent strategic vision or even understood his company's own business plan.

Dick Cheney, president and chief executive officer of Bush Inc., said the company has succeeded by remaining focused on the bottom line.

"Even in a down market, we've been able to provide our investors a high rate of return by diverting cash flows away from unprofitable enterprises and offering dividend payments that our competitors simply can't match," Cheney said.

The company sought to lower expectations earlier this year when it issued a warning in the face of what it said was a looming recession, prompting media analysts to lower their target for the stock.

Analysts had expected the Washington, D.C.-based company to return a net operating loss, but the company instead posted its strongest quarterly gains since the company first released its new corporate service product, Bush 2.0 -- a more easily manipulated, dumbed-down version of Bush 1.0.

This marks the 26th consecutive quarter in which Bush Inc. has beat analysts' low expectations, dating back to its initial public offering in 1994, when it was just a fledgling start-up given no realistic chance of competing with industry rivals. Media analysts have predicted operating losses each quarter, but the company has slipped in ahead of consensus estimates every time.

The company's rise from obscurity and remarkable run of success has turned it into a Wall Street darling. Following a hostile takeover of its chief competitor last year, the company relocated from Austin, Texas to Washington, D.C., and since then, its stock has skyrocketed.

"Expectations rise above that which is expected," Bush said in a conference call with reporters, adding, "They misunderestimated me."

Some of the company's remaining competitors, meanwhile, have complained that the consensus estimates for Bush Inc. have been consistently set too low, and that the company has tried to keep it that way in order to easily surpass forecasts.

"They've been manipulating the market from day one and benefiting from positive media buzz after clearing the lowest possible thresholds," said one Wall Street insider who asked not to be identified.

Cheney defended his company's practices. He said that while being honest with consumers may be a sign of "personal virtue, it is not a sufficient basis for a sound, comprehensive profiteering strategy."

Cheney said he hopes the $1.35 trillion dividend payout will make Bush Inc. an attractive long-term buy, although he acknowledged that the company will actually have to borrow money and possibly begin issuing junk bonds in order to make the payments.

Bush Inc., a spin-off of its parent company, Bush Ltd., is owned by Philip Morris, BP (ARCO), Amway, News Corp/FOX, Enron, Citigroup, MCI Worldcom, Federal Express, Pfizer, Chevron Texaco, Bristol-Myers Squibb, Revlon, Limited Inc, Glaxo-Wellcome, Disney/ABC, Anheuser-Busch, ADM, Microsoft, Coca Cola, Schering-Plough and dozens of other corporations with smaller stakes in the company.

Today's earnings announcement triggered a strong rally in those stocks, as well as across-the-board gains by energy, tobacco and pharmaceutical stocks.

All other stocks fell to new 52-week lows.

Daniel Kurtzman is a San Francisco-based writer and former Washington political correspondent. He runs About.com's political humor Web site.

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