Earnings update: October 22, ’12: Despite the Headlines, Earnings are not the Issue

Sorry for the delay in posting, being out of town for the weekend, put me behind in the 8-ball in terms of the schedule.

As of Friday, October 19th, ’12, the “forward 4-quarter” estimate for the S&P 500 fell a whopping $0.02 (two cents), from $111.85 to $111.83 and in a continuation of the pattern we cited last week, year-over-year growth for the forward 4-quarter estimate rose to +5.72%.

While Friday’s sell-off was ugly, it is my own opinion, but I dont think it has much to do with forward earnings expectations.

Technology is bearing the brunt of the bad headlines as q3 ’12 year-over-year growth for the tech sector is now just barely positive at +1%,down from +2.3% expected as of 10/1, and +13% as of July 1.

The financial sector expectations for q3 ’12 are now +9%, which was a +5% estimate as of 10/1, and a +4% estimate for q3 ’12 as of July 1.

It is interesting that q4 ’12’s estimate for the S&P 500 as a while is still about 10%, with financials and telecom having shown the most improvement since October 1.

Hard to believe that the financial sector is now the port in the storm.

We’ll be back with more later this week.

One worrisome aspecto to earnings is that the number of negative revisions is now outpacing positive revisions for the 2nd quarter in a row. That makes me nervous.

Trinity Asset Management, Inc. by:

Brian Gilmartin, CFA

Portfolio manager

 

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