If earnings reports offer a window into the gears of an economy, and industrial companies are the crucial cogs that keep the gears turning, then I'm sorry to report that the U.S. economy is like a broken machine in need of prolonged and expert repair.
Lead-off earnings reports from industrials are corroborating available data, telling much the same story: The U.S. industrial base is seriously impaired and growing weaker. We're all too familiar with the woes of once-mighty automakers like General Motors
Over recent days and weeks, I've documented these sobering developments through the earnings windows of coal giant Peabody Energy
Where did the energy go?
Absorbing huge excesses of productive capacity that blossomed before the financial disaster took hold, oil and gas producers are continuing to adjust to unanticipated price levels by reducing production and capital expenditures. Fellow Fool contributor Toby Shute sees the oilfield services companies now getting squeezed into lower profit margins with rig rates seeing a pricing correction of about 30%.
Fools know better than to leap to broad macroeconomic conclusions on the basis of a single small-cap company's results, so I trust they will scrutinize results from larger sector components like Schlumberger
I believe it is clear, however, that we can include oil and gas producers and related oilfield services on the growing list of severely impaired domestic industrial sectors.