Earnings Season: So Far, So Good
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Research firm IBES International says that of the 136 members of the Standard & Poor’s 500-stock index to report third-quarter earnings through midday Thursday, 64% had positive surprises, 28% had negative surprises and 8% matched estimates.
The results represent the best early showing since the first quarter of 1995, according to Joseph J. Abbott, equity strategist for IBES.
It’s likely that the figure will come down as the next 364 companies report, he said.
“But for now, it appears that analysts have left a lot more room than usual on the earnings table,” Abbott said. “This could lessen the severity of the downward revisions that are starting to occur for the fourth-quarter forecasts. Forecasts for 1999 remain a different story--they will have to come down.”
The average operating earnings-per-share surprise is 0.7% below the analysts’ estimates, largely because of negative jolts for BankAmerica, Pfizer, Merrill Lynch and PepsiCo.
Small companies have fared relatively well, Abbott said. While S&P; industrial earnings have declined 10.3%, S&P; small-cap 600 earnings are up 1.4%.
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