I’ve repeatedly used variations of the statement that a corporation exists only to increase shareholder value and that nothing else matters if it conflicts with this principal. Goldman Sachs’ story on Walmart’s expected earnings report is instructive.

From BenZinga:

In a company note, Goldman Sachs analysts wrote that Wal-Mart “could get a lift on 3Q guidance given negative sentiment.” Consensus estimates are that WMT will earn $0.97 per share in the third quarter. The company will report earnings tomorrow morning prior to the opening bell.

The analysts further said that, “We believe inline with consensus. Despite our reduction, we believe Wal-Mart shares could bounce given muted expectations as investors are increasingly worried about an earnings miss, as evidenced by the company trading at a trough multiple of less than 12x our 2011 estimate. Given a low bar heading into the quarter, we look for an inline 2Q and decent 3Q guidance ($0.90-$0.95 versus $0.91 consensus) to be enough to lift shares.”

There is nothing in that statement about a fair wage and fair profit. Nothing about Walmart’s place in the community, not a word about working toward a shared American dream, not a mention of responsibility to anyone other than those who hold shares of Walmart stock.

As long as this continues to be the case, we will have to deal with an economy held together by hype and band-aids.

Jeff Hess: Have Coffee Will Write.

This entry was posted on Tuesday, August 17th, 2010 at 1108 by Jeff Hess and is filed under Economics, Low-Wage Capitalism, Wall Street. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.