The Trial Balance is CFO’s weekly preview of stories, stats, and events to help you prepare.
Part 1: Pittsburgh Botanic Garden and Blossoming Finance Leaders
This week, reporter Adam Zaki will publish a Q&A with Bob Mermelstein, CFO of the Pittsburgh Botanic Garden. Mermelstein provides perspective on the transition from for-profit to non-profit, his role in fundraising, hybrid work, succession planning as he winds down his career, and how the city of Pittsburgh embodies work ethic. (1/25)
Zaki will also publish a story about the perspective of finance leaders of tomorrow, highlighting what potential CFOs of the future are looking for out of their leaders, career trajectory, work experience, work-life balance, and more. (1/26)
Part 2: This Week
With the probability of a Fed funds rate cut in March now below 50%, the question is if economic data and earnings reports will reinforce the argument that the economy is still too hot to justify lower interest rates.
The roster of fourth-quarter earnings reports (full list below) this week includes consumer-oriented companies (Netflix, Procter & Gamble, Visa, Levi-Strauss, Colgate-Palmolive) and industrial stalwarts (GE, Lockheed Martin, Northrop Grumman). A note from Ned Davis Research on January 18 said the bull market has entered “the earnings-driven phase,” meaning price multiples will tend to be flat or down. “Sales growth is challenged, so companies need to focus on margins to drive earnings-per-share growth in [calendar year 2024],” according to the report.
On the economic data front, the preliminary GDP report for the fourth quarter arrives on Thursday, with economists expecting growth in the 1.7% to 2% range. A higher-than-projected reading could be an indicator of upside inflation risk.
The Fed’s preferred inflation gauge prints on Friday. Economists expect the December core personal consumption expenditures index to come in at about 3% year over year. Projections are for solid numbers in some of the week’s other data releases, including personal income and spending, new home sales, pending home sales, and mortgage applications.
New Hampshire’s Republican presidential primary on Tuesday may not be much of a contest, as Florida Governor Ron DeSantis dropped out of the race over the weekend. According to 538, polls show Donald Trump leading Nikki Haley by 49.8% to 36.1%.
While stock market volatility, as measured by the VIX index, is still “flashing green” for new issues, the U.S. IPO market is off to a slow start. BrightSpring Health Services (BTSG) is expected to start trading this week, according to IPO ETF provider Renaissance Capital. The home and community-based healthcare service company is shooting for a raise of $880 million at a $3.4 billion market cap. BrightSpring serves over 400,000 patients daily through a network of 10,000 clinical providers and pharmacists, according to Renaissance.
Meanwhile, the Securities and Exchange Commission will consider adopting new rules for the drivers of the IPO boom in 2021 — special purpose acquisition companies (SPACs) and de-SPAC transactions (the subsequent combinations between SPACs and target companies). An open meeting of the commission takes place on Wednesday at 9:15 a.m.
Earnings this week: Tesla, Netflix, Visa, American Airlines, Brown & Brown, United Airlines, Zions Bancorporation, Johnson & Johnson, Procter & Gamble, Netflix, Verizon Communications, Texas Instruments, General Electric, Lockheed Martin, Abbott Laboratories, IBM, AT&T, General Dynamics, Las Vegas Sands, CSX, Visa, Intel, Comcast, Union Pacific, Southwest Airlines, Levi Strauss, Alaska Air, American Express, Colgate-Palmolive, Norfolk Southern, SAP, Hyundai, Kia, Tata Steel, Dow, United Rentals, Northrop Grumman, and Capital One.
Part 3: Develop and Execute a High-Growth Post-Acquisition Strategy
In the face of restricted access to funding and persistently elevated interest rates, CFOs face increasing pressure to deliver equity value after a private equity recapitalization. To gain the confidence of their key stakeholders and advance their companies’ long-term financial goals in this high-stakes environment, CFOs need to formulate a resilient strategy across their P&L and balance sheets to boost cash flow. Seth Eisenstein and Brian Murphy, managing directors at Berkeley Research Group, offer six ways to get started. (1/23)