For Immediate Release
Chicago, IL – February 17, 2010 – Zacks Research Equity Strategist Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.
Earnings to More than Double
The revisions ratios for both 2010 and 2011 are strong, and should give us confidence that those growth rates will actually be achieved, if not exceeded (although it’s still early for 2011). Every sector but Utilities and Transportation has seen more estimates raised for 2010 than cut, and the revisions ratio for 2010 stands at an extremely strong 1.67. In other words, the positive earnings surprises are causing the analysts to raise their sights for the future.
Unlike the other three quarters of the year, there is no “mechanical” reason to raise estimates in response to a positive earnings surprise. Fourth quarter 2009 earnings are not part of the full year 2010 earnings, the way the third quarter 2009 earnings were part of full year 2009 earnings. The raising of the sights extends into 2011, where the revisions ratio stands at 1.85.
The Auto sector’s strength is being driven by Ford (F) and Johnson Controls (JCI). All three of which have double digit estimate increases, leading to double digit increases in their mean estimates. None of the three had any estimate cuts for 2010.
The 2011 strength in Tech is being led by some of the biggest and most well know Tech firms, including Microsoft (MSFT), Apple (AAPL) and Texas Instruments (TXN).
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Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.zacks.com
