Second Quarter Earnings Expectations

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.

Comments

[yahoo finance:]

How are these people getting this information? Are they getting this info from insiders at these various companies? If so, the feds need to investigate and, if found to be so, these folks need to be put in prison and have key thrown away after they are locked up !!!!

Also, what better way for these trashy columns to make money but to preach doom and gloom. Ever heard of a column or newspaper that preached the good and only the good. Probably not, cause that doesn't make money !!!!

I hope these company all announcement POSITIVE results and put all these BASTARDS out of business !!!!

2008 Jul 07 03:09 PM

[E.D.Hart:]

Yahoo Finance,
I wrote you a poem:

This isn't gloom
And doom
This is reality.


The information is publically available at many financial websites--consensus earning estimates revisions are widely used to predict the direction of stocks. Go to Zacks.com to check it out.

Also, hope is not a good investment strategy.

2008 Jul 07 04:28 PM

[SHartwell:]

Where the information comes from:

Analysts write research reports in which they forecast earnings.

Companies (like Thomson and Reuters) then average these forecasts to get an average expectation for each company.

Companies like Bespoke then add up all the forecasts for companies in a particular sector to get "expected" earnings.

You, too, can see all these forecasts. Go to Yahoo finance, enter a ticker, and then click on "Analyst Estimates" on the left-hand side of the screen.

Lest the analysts be tempted to goose the forecasts for favorite companies, other firms (like StarMine) follow each analysts' estimates over time and rate their accuracy.

2008 Jul 07 07:52 PM

[Urbane Gori...:]

These guys are good... I read their articles consistently. They do not spread gloom and doom.. In fact most complaints are they don't draw conclusions.... Works for me.. "Jus the fax Ma'am. Nuttin' but the fax!"

Thx jegan ;-)

2008 Jul 08 03:20 PM