Second Quarter Earnings Expectations

 |  Includes: APA, COP, CVX, KEY, LM, MER, TEG, TSO, XLF
by: Bespoke Investment Group

With earnings season starting this week, below we highlight the current estimated second quarter earnings growth for the S&P 500 and its ten sectors.  As shown, Financials and Consumer Discretionary are once again expected to drag down the index as a whole.  Financials are expected to see earnings decline by 60.1% versus the second quarter of 2007, while Consumer Discretionary earnings are expected to drop 23.5%.  The index as a whole is expected to see earnings decline by 11.2% versus Q2 '07. 

But all is not expected to be bad.  In fact, seven of the ten sectors are still expected to see earnings growth in Q2 '08 versus Q2 '07, with Energy at the top of the list at 25.4%.  Technology trails Energy at 13.1% growth, followed by Consumer Staples (8.5%), Health Care (4.9%) and Industrials (3.3%).


For those interested in specific stocks, below we highlight ones in the S&P 500 that have seen the biggest increases and decreases in earnings estimates for the current quarter over the last month.  As shown, TEG has seen its earnings estimates increase by nearly 37 cents.  COP and CVX trail TEG at $0.30, and other names on the upside list include XOM, AIG, EOG, EK, X and GS.

The list of stocks with the biggest decreases in earnings estimates is littered with Financials, including MER, C, LM and LEH.