It turns out that they were also way too high for Q2:
"Halfway through earnings season, banks are still a drag, tech firms are doing OK while the overall outlook remains cloudy.
With 249 of the S&P 500 companies reporting results, second-quarter profits are on track to decline 17.9% vs. a year earlier, according to Thomson Reuters.
"I’d rate (earnings so far) as pretty bad," said Sam Stovall, chief investment strategist at S&P Equity Research. S&P forecast a 10% drop at the start of the quarter but now sees about a 20% shortfall, he said."
Interestingly enough, the chart of earnings from IBD also includes a line for earnings ex-financials
If they were trying to illuminate the earnings picture, they might have also shown earnings ex-energy. As Bloomberg noted earlier this quarter, "Take away Exxon Mobil Corp., Chevron Corp. and ConocoPhillips and profits at U.S. companies are the worst in at least a decade."
One would think showing an ex-negative might be balanced by showing the ex-positive. (One would be wrong)
And it is somewhat odd that I don’t recall IBD showing SPX earnings in 2005-07 period ex-financials. If they were truly astute, they might have shown how artificially pumped up earnings were over that period. Had they done so, it would have revealed exactly how artificial those profits were, and could have saved their readers untold billions.
No matter. Such is the money losing ways of the perennial cheerleaders. Read and watch them at your own financial risk . . .
S&P500 Profits Ex 3 Oil Cos = Awful (May 2008)
S&P500 ex-Risk (November 2007)
S&P Earnings So Far Falling Short Of Q2 Projections
INVESTOR’S BUSINESS DAILY, 7/25/2008