Do We Need Analysts’ Estimates?

On days like this, I wonder why we even bother to listen to analysts’ estimates. Advanced Micro Devices (AMD) earned 18 cents a share, creaming the Street’s estimate of eight cents a share, yet the stock falls. Earlier, Alcoa (AA) slashed its earnings forecast, then beat it, and rallied. Apple Computer (AAPL) beat by a penny, and was creamed in after-hours yesterday, but is now trading modestly lower. The big secret announcement is still to come.
On our Buy List, Thor Industries (THO) reported earnings of 58 cents a share, which was one or two cents below estimates, depending on whom you ask. The stock is trading 19 cents lower. Progressive (PGR) said that its third-quarter earnings fell 22% to $1.54 a share, which is a nickel below estimates. And the stock is…higher.
Progressive also had to deal with losses from Katrina and Rita. The company said that its Katrina losses will be about $173.6 million, which is $54.1 million higher than it previously estimated. Progressive also said that Rita will cost $11.9 million.
Our Buy List is mostly down today, although Medtronic (MDT) is rallying thanks to its long-term earnings forecast. Another Minnesota stock, although not on our Buy List, is Fastenal (FAST). The home-improvement store reported very good earnings, beating the Street by four cents a share. The stock is currently up over 7%.

Posted by on October 12th, 2005 at 12:22 pm


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.