For Immediate Release
Chicago, IL – January 26, 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 Explode from Low Base
By raw count, firms with rising EPS year over year outnumber decliners by a 3:2 margin. Sequentially, it has not been as profitable a quarter as the third quarter was, with total net income in the 4th quarter reported so far down 9.65% from what those same firms reported in the 3rd quarter. Still, the numbers are coming in better than expected, with a median surprise of 6.38% (about double normal).
The surprise ratio is also quite positive, with 69 positive surprises versus only 18 disappointments, but that 3.83 ratio is well below the stellar results of the 3rd quarter. Results are still very preliminary, with fewer than one in five reports in, and not all sectors report at the same rate.
The sectors with the highest median surprises have only a handful of reports in, so those medians are likely to change (fall?) significantly by the time all the reports are in. The Tech sector, however, is looking very strong, and has more than just a handful of reports in. It has seen 16 positive surprises and only a single disappointment, with a median surprise of 8.03%.
In Tech, the sector continues to be led by the microchip stocks, most notably Intel (INTC), Linear Technologies (LLTC) and Micron Technology (MU). Also within the sector and worthy of mentioning is strength in some of the bigger and more well-known firms in the sector, including Apple (AAPL) and Microsoft (MSFT).
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Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.zacks.com
