From the WSJ:
When measured against analyst estimates, second-quarter earnings from U.S. companies are looking solid-but revenues are looking pretty dismal.
Because of that, some investors are staying cautious with their outlooks for the rest of the year.
U.S. companies are posting revenue below analyst estimates at the highest rate since the first quarter of 2009, according to FactSet.
"Many of these companies guided down on their earnings numbers, and perhaps the revenue estimates didn't slip enough," said Jason Pride, director of investment strategy with Glenmede, an investment-management firm with roughly $20 billion under management. "We think it's simply a reflection of the growth scare we find ourselves in today. That's not a supportive thing for the markets."
Only 42% of the 120 companies in the Standard & Poor's 500-stock index that have reported so far this quarter have beaten analysts' revenue estimates, according to Thomson Reuters data. That contrasts with the 63% of S&P 500 companies, on average, that have beaten analysts' quarterly revenue projections over the past decade.
Just three quarterly reporting periods in the past 10 years have seen revenue beating estimates at a rate below 42%. Those came in late 2008 and early 2009, when the U.S. economy was sinking into recession. This quarter, the recession fears are coming from Europe, as Spain and Italy's borrowing costs have skyrocketed, while the U.S. recovery is becoming increasingly shaky, with employment growth slowing.
The fun never stops. Add this to the wall of worry. Finding value is getting difficult.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.