Posts filed under “Valuation”
This slipped by quietly last week:
Standard & Poor’s U.S. corporate earnings projections for Q3 has slipped from prior levels, and are now negative for the quarter. Earnings for the S&P 500 companies are expected to decline 2.5%. Lackluster results, especially from Consumer and Finance companies, led to this outcome.
On a year-over-year basis, the S&P 500 earnings declined 8.48% from Q3 2006, marking the first such negative quarter since 2001 (-24.2%). As recently as October, the consensus estimates were for a gain of 3.3%. Quarterly revenue is forecast to fall even further — a decline of 4.1%.
Q4 numbers have also been scrubbed lower — though not quite as thoroughly as Q3. Its almost as if the analysts don’t yet accept Q3 as anything more than an aberration. Reuters is estimating Q4 S&P500 profits of +5.9%, which has slipped from growth expectations of 7.6% percent last week. In Q3, perhaps the one time massive $39 billion charge by GM is thought of as the reason for the poor quarter. If GM gets most of the blame, we do not have to consider the unholy trinity of problems in the Housing, Credit and Consumer sectors.
Speaking of which: In Q3, the big losers were Consumer companies, down 26% sequentially and 38.9% Y-Y. The Financial sector was down 33% Y-Y. Several sectors shown strength, notably, Health Care and Technology, at +12% and 15% respectively.
S&P reported Friday that "with 93% of the data in, third quarter operating earnings for the
S&P 500 are preliminarily set at $21.08 per share, compared to
$23.03 for the third-quarter of 2006."
For those of you who like to play in Excel, I uploaded the full database of S&P500 estimates via Standard & Poor’s website: SP500EPSEST.XLS. Tables below . . .
S&P500 Quarterly History
Standard & Poors
Q3 Financials Sector Earnings Plunge 33.1%; S&P 500 Earnings Decline 8.48%
S&P 500 Q3 Earnings Ex-Financials Up 1.6%
November 15, 2007: 12:20 PM EST
S&P 500 profit outlook for dims further
Reuters, Nov 19, 2007 11:12 AM GMT136
Fannie Mae’s fuzzy math: Fortune magazine reported that the lender changed the way it discloses bad loans, which could be masking rising credit losses. “Investors might want to take a closer look at Fannie Mae’s latest earnings report. Lost in the unsurprising news of the mortgage lender’s heavy losses was a critical change in the…Read More