Monday, October 11, 2010

Analysts Lower Earnings Expectations For S&P 500 Index In Q3

The earnings season for the third quarter is now underway and it seems analysts have lowered their expectations for earnings. Although expectations have been lowered, earnings are still estimated to increase by 24% compared to Q3 2009. Three of the S&P 500 sector earnings were revised higher, i.e., industrials, technology and consumer discretionary.

From The Blog of HORAN Capital Advisors
  • Quarter to date 30 companies have reported earnings with 80% exceeding expectations and 7% meeting expectations. 13% of the companies earnings reports were below analyst expectations.
  • The ratio of negative-to-positive pre-announcements for the S&P 500 for Q3 2010 is 2.0. This ratio is slightly below the long-term average of 2.1.
  • The forward four-quarter (Q410 – Q311) P/E ratio for the S&P 500 is 12.7, below the average forward four-quarter P/E ratio of the previous 52 weeks (13.7).

From The Blog of HORAN Capital Advisors

As the quarter unfolds, company comments regarding their future outlook is one piece of news we will be evaluating in determining the sustainability of this market advance.

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