GDP May Have Slowed, but Earnings Didn't

The gross domestic product numbers released Friday showed that the economy was growing at a slower pace in the second quarter than the first, but you'd be hard-pressed to see signs of the slowdown in corporate earnings.

Yet again, the vast majority of firms that reported second-quarter results beat analyst expectations as global demand remained resilient and cost-cutting measures improved profitability.

Outlooks were more tepid. Management teams generally expected growth to be more modest in the back half of the year as comparisons to last year's results become more and more difficult.

Still, the continued strength in corporate earnings shows that there is life in the recovery and that the prospect of an imminent double-dip recession is fading.

Here is a look at some of the biggest releases of the week along with management comments from the earnings call transcripts.

 U.S. Steel (X)
After five quarterly losses, U.S. Steel finally posted a profit across all three operating segments in the second quarter. Management is expecting stable results for the rest of the year as "U.S. and European economies continue to work their way through a gradual and uneven recovery process."

 BP (BP)
Overshadowing BP's actual results was the confirmation that Bob Dudley will take over as CEO from Tony Hayward Oct. 1. Dudley sees many challenges ahead resulting from the Gulf oil spill, but he thinks that the firm's "very strong businesses and great professional teams" will help put the company back on track.

 ExxonMobil (XOM)
Higher crude-oil price realizations, improved refining margins, and strong chemical results powered ExxonMobil's earnings 85% higher in the second quarter. However, management is unsure about the economy saying that they "continue to see the effects of mixed economic activity around the world impact the pace of economic recovery and near-term supply and demand balances."

 Motorola (MOT)
Although Motorola seems to have a hit on its hand with the Droid X, its mobile handset division remains in the red, and Motorola is still having trouble gaining traction and market share. Co-CEO Sanjay Jha believes that the division is on its way to "profitability in fourth quarter" as the firm launches 20 new phones across the globe.

 Western Union (WU)
Western Union began to show signs of improvement in the quarter, posting a 2% increase in revenue. Although the company still has a ways to go, these results support our opinion that the drivers of historical growth will start to reassert themselves as the economic picture stabilizes.

 Teva Pharmaceutical (TEVA)
Three generic drug launches, minimal generic price erosion, and another Copaxone price increase during the quarter fueled the total 12% year-over-year revenue growth for Teva.

 Sprint 
Sprint is moving in the right direction as customer defections began to wane. The firm's churn rate is still higher than its rivals', but the core Sprint brand has finally returned to growth. CEO Dan Hesse prescribes the reduction in the churn rate to "improvement in customer-care satisfaction."

 Waste Management (WM)
Waste Management showed an improvement in waste volumes, but much of the increase was the result of very weak numbers in the year-ago quarter. Management has not yet reached its pricing goals for the year, and they expect to pass on higher prices to clients in the second half of 2010.