The Earnings Scorecard

According to Zacks, 80% of the S&P 500 has reported earnings so far; 279 companies have beaten expectations, 89 have missed and 50 have nailed it on the head. For 2005, profits are expected to rise by 12.1%, and 12.5% for next year.
Profit growth is now expected to be 11.7% for the fourth quarter. Every sector but tech is expecting to have slower growth this quarter compared with the third quarter.
Here’s what Zacks has to say about revisions:

Positive estimate revisions are widespread, eight of the sectors had more positive than negative revisions over the past four weeks.
Energy loses the lead for 2005. While the estimates are still rising, it falls to third place in terms of average estimate change up (1.04%) and eighth place in terms of the revisions ratio (1.15).
Energy still firmly in the lead for 2006. Its average estimate has increased 4.27% on a revisions ratio of 2.84.
Technology has the highest 2005 increase in average estimate, rising 2.71% on a revisions ratio of 1.35.
Telecom has the highest 2005 revisions ratio at 3.39, which powered a 1.85% increase in the average estimate.
Eight of the ten sectors have more positive revisions than estimate cuts for 2005, five of ten for 2006.
The Consumer Discretionary sector suffered an average decline of 5.47% for this year and 3.48% for next year.

Posted by on November 8th, 2005 at 7:15 am


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