Q2 Earnings Preview … Still Not Good

May 31, 2012 10:00pm by

Click to enlarge:

Factset – Earnings Insight, May 25, 2012
Analysts Begin To Take Down Q2 Estimates; Double-Digit Growth Still Projected for Q4
During the month of April, there was little change to the estimated earnings growth rate for the second quarter. On March 31, the estimated earnings growth rate for Q2 2012 was 6.2%. On April 27, the estimated earnings growth rate was 6.1%. However, analysts have reduced estimates for Q2 2012 during the past few weeks. As of today, the estimated earnings growth rate stands at 4.4%. The Materials, Energy, and Financials sectors have witnessed the highest percentage cuts to earnings estimates since the start of the second quarter. Analysts also have lowered earnings growth expectations for Q3 2012 (to 2.8% from 4.0%) and Q4 2012 (to 14.9% from 15.5%) since March 31. Despite the slight decline in earnings estimates for Q4 2012, analysts are still calling for double-digit growth (14.9%) for the quarter. Six of the ten sectors are predicted to report double-digit earnings growth, led by the Materials (33.3%), Financials (28.7%), and Telecom Services (27.0%) sectors.

Comment

Te chart above comes from Bloomberg estimates while the story is from Factset. Normally these two sources agree with each other. Both agree that Q2 2012 earnings growth estimates are falling. However, analysts surveyed by Bloomberg are projecting negative earnings growth while Factset’s survey is still looking for positive growth at 4.4%. Either way, earnings growth estimates are going the wrong way.

Source: Bianco Research

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