About Those Second Half Earnings

Chuck Jones at Forbes has some depressing news about earnings for later this year:

As 450 of the 500 companies in the S&P 500 have reported financial results for the June quarter FactSet estimates that revenue growth has been 1.8% (vs. a 1.2% estimate at the end of June) and earnings growth has come in at 2.1% (vs. a 0.6% estimate). A 2.1% increase would be the third lowest rate in the past four years AND if the Financial sector is removed earnings for the S&P 500 would have DECREASED by 3.1%.

As I previewed in previous notes estimates for the Third quarter have come down fairly significantly in the past six weeks. At the end of June Third quarter revenue growth was expected to be 3.0% and has only dropped slightly to 2.9%. However, earnings growth has decreased from 6.7% to 4.3% in six weeks and was over 10% in mid-April.

Those numbers are from FactSet. According to the numbers from S&P, the estimate for Q3 earnings has dropped from $30.27 in March 2012 to $27.17 today. The Q4 estimate is down but not as much, falling from $31.18 in March 2012 to $29.13 today.

Analysts now expect the S&P 500 to earn $108.51 this year, and $122.37 next year. As always, I caution against putting too much faith in estimates beyond a few months out.

Posted by on August 12th, 2013 at 1:20 pm


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