Earnings Season Progressing Nicely

Monday, January 29, 2007 | 11:15 AM

Last week, we looked at how S&P500 companies were doing earnings wise via Birinyi Associates. The numbers were a touch soft (see Earnings Season Getting Underway).

This week teaches us a lesson in the dangers of extrapolation:  With 34% of S&P 500 companies reporting, the earnings picture looks much better (versus last week's charts 11%).

The beats and misses are much more in line with the recent SPX earnings history, which has been the bulwark of the Bull's case.   
>

Spx_eps_beats

Charts courtesy of Birinyi Associates
>

Mike Thomson of Thompson Financial has been the prime proponent of "Its all about earnings;" He has been clearly right so far.

The one dark cloud has been guidance: Its a but softer than it has been recently:

Spx_guidance
Charts courtesy of Birinyi Associates


This may change further as reports come in; However, 34% is a much more signficant sample than 11%, and strongly implies earning will be consistent with previous quarters.

Monday, January 29, 2007 | 11:15 AM | Permalink | Comments (14) | TrackBack (0)
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Comments

Barry

Interesting article. I find it interesting because first we have earnings estimates that I would consider almost meaningless even if one was to take the average of all analysts' estimates. Second we have the actual reported earnings which are just as meaningless if not more meaningless as we know how from revenues right down to bottomline earnings can be represented in a million ways, and CEOs/CFOs can do whatever they like to present whatever they want. There is no agreement even among accountants or the law about how to present accounts. So here we are comparing two data sets that are both meaningless to start with and drawing conclusions? Imagine in the days of Enron looking at Enron estimates versus reported earnings and how all that turned out! Both numbers were off by a billion miles! Anyway, just my humble thoughts. I guess we have to find something to analyze and that's probably the best we have?

Posted by: Lauriston | Jan 29, 2007 11:45:19 AM

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