Posts filed under “Earnings”

Here Comes Earning Season !

Source: Bianco Research


Don’t look now, but a hotly anticipated — and in some quarters, feared — earnings season is upon us.

Of the first 25 “real” companies reporting, things have actually been pretty decent. The counter is that these are banks (JPM, WFC), who are much freer in the leeway in their returns, and non consumer sensitive stocks, like Johnson and Johnson and Yum Brands.

Bloomberg, on the other hands, notes that earnings pessimism is at its highest levels since the crisis:

“Earnings pessimism among U.S. chief executive officers is climbing to levels last seen when the Standard & Poor’s 500 Index was mired in bear markets. Over the last four weeks, the ratio of companies saying profits will trail estimates compared with those saying they will exceed them climbed to 4.3, according to 69 earnings previews compiled by Bloomberg. The rate matches peaks reached in February 2009 and October 2001, the data show.

Warnings that estimates are too high by companies from Intel (INTC) Corp. to Caterpillar (CAT) Inc. came even as analysts lowered predictions for third-quarter income growth by 10 percentage points this year. Bears say the 0.9 percent decrease in profits predicted by analysts, the first quarterly retreat in three years, will limit gains in equities.”

Its still early in Q3 reporting season — but with the market in rally mode these days, anything can happen once the numbers come in.

Profit Pessimism at 2009 High on Intel, FedEx Forecasts
Lu Wang
Bloomberg, Oct 12, 2012 4:44 PM

Category: Corporate Management, Earnings

Michael Belkin Predicts 40% Stock Market Drop

Hedge Fund Consultant Michael Belkin spoke at The Big Picture conference, predicting a 40% stock market drop in the coming 12-15 months. Belkin joins Sam Mamudi to discuss his case for a market drop.

10/15/2012 1:43:26 PM4:14

Category: Cycles, Earnings, Video

GE’s Jack Welch Knows About Cooking the Books

  Of all the people who have something to say about the BLS, none is more unintentionally ironic than former GE CEO Jack Welch. I have long stated that Jack welch was one of the luckier, more wildly over-compensated CEOs around. He became CEO of General Electric in 1981, just before an 18 year bull market…Read More

Category: Corporate Management, Data Analysis, Earnings, Really, really bad calls

Earnings Recession?

Click to enlarge: Source: Bloomberg     Markets are screaming higher today on the prospects of ECB/FOMC action. The concern whent hat wears off is what ahppens with Q3 & Q4 profit. UBS chief U.S. equity strategist is concerned about an “Earnings Recession” coming to the US, as illustrated in the chart above. The Standard…Read More

Category: Earnings

Merrill: Downward Revisions Slow

Two nice looks at the long — and even longer — term Earnings Revision Ratios from Merrill Lynch:     Click to enlarge:   Source: BofA / Merrill Lynch Revision Ratios September 09, 2012

Category: Corporate Management, Earnings

Meb Faber: Buy Cheap Cyclically Adjusted P/E (CAPE)

Cyclically Adjusted P/E Click to enlarge:     Meb Faber of Cambria Investment Management looks at 10 years of earnings. Based on a methodology developed by Yale University Professor Robert J. Shiller, Faber concluded from an analysis of cyclically adjusted price-earnings ratios, designed to minimize the effect of economic swings on profits. Cyclically adjusted P/E, also known as CAPE,…Read More

Category: Earnings, Quantitative, Technical Analysis, Valuation

Stocks Near 5-Year Highs Despite Worst Earnings Season Since 2009

Source: Yahoo

Category: Earnings, Video

The Dismal Earnings Season

The Wall Street Journal – U.S. Profit Streak Hit by Global Weakness Bid adieu to growing profits. Slowing economies from the U.S. to China, increasingly wary shoppers, recession in much of Europe and a stronger dollar could bring to an end at least 10 continuous quarters of profit growth for America’s biggest companies. Until Friday,…Read More

Category: Earnings, Think Tank

Earnings vs. Stock Returns

MarketWatch – Good news: Earnings growth is slowing Worried that lower earnings growth will lead to a bear market? You’re not alone. Almost everyone else is concerned too. But, by following the herd, you run the distinct possibility of becoming too worried: The stock market historically has performed better when earnings growth is slower than…Read More

Category: Earnings, Think Tank

Earnings vs. Revenues

Click to enlarge: MarketBeat – Charts of the Day: Beware if Earnings History Repeats As if there weren’t enough warning signs flashing from earnings season, the always thoughtful John Mauldin offers a one-word assessment of the future for corporate profits: Beware. “Currently, profit margins are cyclically high, near historical highs, and already at unsustainable levels,…Read More

Category: Earnings, Think Tank