Posts filed under “Valuation”

S&P 500 Profit Flips Negative for Q3

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 . . .

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Sector Performance

Sector_earnings

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S&P500 Quarterly History

Sp500_q_history_2

 

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Sources:

Download SP500EPSEST.XLS
Standard & Poors

Q3 Financials Sector Earnings Plunge 33.1%; S&P 500 Earnings Decline 8.48%
PR Newswire
S&P 500 Q3 Earnings Ex-Financials Up 1.6%
November 15, 2007: 12:20 PM EST
http://money.cnn.com/news/newsfeeds/articles/prnewswire/NYTH11115112007-1.htm

S&P 500 profit outlook for dims further
Justin Grant
Reuters,  Nov 19, 2007 11:12 AM GMT136
http://www.reuters.com/article/marketsNews/idUSN1948798120071119

Category: Corporate Management, Data Analysis, Earnings, Investing, Valuation

Fannie Mae Looks Like Hell

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

Category: Corporate Management, Credit, Derivatives, Short Selling, Valuation

Shipping to Lattes: The Problem of Higher Prices

Category: Consumer Spending, Earnings, Economy, Valuation

FASB 157 — Delayed, or Not?

Category: Corporate Management, Earnings, Valuation

Financials: Worse than they look?

Category: Corporate Management, Credit, Derivatives, Earnings, Psychology, Real Estate, Valuation

When Does GM Get Kicked Out of the DJIA?

Category: Corporate Management, Economy, Financial Press, Markets, Valuation

S&P500 ex-Risk ?

Category: Corporate Management, Data Analysis, Derivatives, Earnings, Mathematics, Valuation

Headline of the Day II: $1 Trillion!

Category: Commodities, Contrary Indicators, Energy, Valuation

Google: #5 US Market Cap

Category: Markets, Valuation

Buffett to Buy Bear? Bull$%*# !

Category: Corporate Management, Derivatives, Financial Press, M&A, Valuation