Facinating piece from SocGen’s Cross Asset Research looking at expectations for global earnings in 2012. It is subtitled “Death by a thousand cuts; double digit downgrades for Eurozone and Japan” — so do not expect cheerleading.

The highlights:

• Recent earnings forecasts cut by 4.9% and 6.9% for 2011 and 2012, respectively.

• Severe downgrading of both 2011 and 2012 consensus forecasts, with Japan and the Eurozone seeing double-digit percentage cuts to
next year’s earnings;

• US stands out with only minor cuts to 2012 forecasts.

Note that on an ex-financial basis, US 2012 forecasts have seen just a 2% cut, which SocGen describes as “hardly consistent with a recessionary or low growth outlook.”

So either we will miss a recession in the US, or analysts are too optimistic.


Global earnings revisions and historical earnings growth
click for ginormous chart


Global Earnings Estimates Analysis: Death by a thousand cuts; double digit downgrades for Eurozone and Japan (PDF)
Societe Generale, December 22, 2011  

Category: Earnings, Economy, Markets

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Global Earnings Estimates Analysis”

  1. constantnormal says:

    We must be an incredibly wealthy nation if we can continue to carry, even grow, our consumer debt levels while also dealing with historically high unemployment combined with historically low participation in the labor force.

    And don’t forget our own boomer bubble, propelling a huge segment of the population toward a retirement that they have not adequately prepared for, arriving Real Soon Now. Those people are facing a distinct lack of good choices for safe and secure places to stash their income in preparation for retirement — it seems unlikely that in will be in higher credit card balances.

    Our consumption-driven economy seems to be running out of road …

    The obvious answer is that we too can expect to see large cuts in expected growth, the forecasters are – as usual – not seeing the forest for the trees.

  2. [...] estimates, around the world, continue to get revised lower.  (Big Picture, Money [...]

  3. Doofus says:

    BR’s key quote:

    So either we will miss a recession in the US, or analysts are too optimistic.

    How many times have we seen – on this blog – articles that detail the disconnect between the cheerleading of analysts and actual performance? Recently, in fact, there was a post that showed that the disconnect has gotten worse over the last 20 years.

    So how bad will 2012 be?

  4. [...] Global earnings estimates for next year are headed in the wrong direction.  (TBP) [...]

  5. BigSpooky says:

    Unless DD, INTC & ORCL are all screwing up, I think chances are US estimates are still too high. Some specific examples of estimate latency – look at the mid-con refiners like HFC – cracks have come from $30+ to ~$12, with structural changes to the market that make 30+ highly unlikely going forward, yet earnings estimates for NFY have only been trimmed by .20 to $7.05. If cracks stay here, they will be lucky to make $3-4. There are many more examples, but earnings estimates are like gas prices – quick to react to the upside, very slow to come down.

  6. constantnormal says:

    (clicking heels together wildly …)

    … there’s no place like home … no place like home … no place like home ….

    Auntie Emma? Is that you?