Here’s what Zacks has to say about the upcoming earnings season:
By Daniel at 3 October, 2009, 5:01 pm
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Third quarter expected to be down 23.8% year-over-year
Fourth quarter to more than double year ago, but it is all in the Financials
2009 total net income expected to fall 7.3%, but rise 23.8% in 2010
More than half expected to post positive growth in Q4
Bottom up estimate for S&P 500 now $59.61 in 2009
S&P 500 now expected to earn $73.81 in 2010
Top down estimates $53.94 and $68.40, respectively
Early results strong with a median surprise of 5.32%
A tiny sample with only 3.2% of reports in
Total estimate increases outnumber cuts almost 3:2 for 2009
Upward revisions outnumber cuts by more than 7:4 for 2010
Revisions ratios for both years slipped, but are still up big from earlier in the year
Total revisions activity near seasonal lows
For 2009, Discretionary and Materials lead; Utilities Telecom lag
Discretionary and Tech strong for 2010
S&P 500 P/E at 17.5x based on 2009 earnings, an earnings yield of 5.71%
P/E of 14.2x based on 2010 earnings, or earnings yield of 7.07%
Earnings yields attractive relative to Treasury and corporate bond yields
Health Care has lowest P/Es of any sector
Total net income expected to decline 23.8% in the third quarter from a year ago
Median EPS declined 16.8% in Q2; a 15.3% decline is expected in Q3
Explosive 118.3% growth in total income expected in Q4, but it is all about last year; median EPS expected to fall 6.3% in Q4
Financials responsible for ALL of the expected year-over-year growth in the fourth quarter (very easy comps)
Materials and Energy saw massive year-over-year declines in Q2 and are expected to again in Q3
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