Zacks Earnings Trends Highlights: Cisco, Amazon, Google, Apple and Intel
CHICAGO, Nov. 19, 2012
CHICAGO, Nov. 19, 2012 /PRNewswire/ -- "Zacks Director of Research Sheraz Mian
says any way you look at it, it has been a fairly weak earnings season."
Q3 Earnings Season Mostly Behind Us
The bulk of the third quarter reporting season is now behind us, with results
from 460 companies in the S&P 500 or 92% of the index's total membership,
already known. The earnings season has ended for half of the 16 Zacks sectors,
with most of the remaining sectors waiting for only a handful of reports still
to come. Retail has the most quarterly reports pending, with third quarter
results from 29.8% of the sector's companies still to come.
Any way you look at it, it has been a fairly weak earnings season; the weakest
since the start of the current earnings cycle in 2009. Importantly, this
earnings season has raised credible doubts about the earnings outlook for the
fourth quarter and beyond.
Total earnings for these 460 companies are down 2.2% from the same period last
year, with 62.6% of the companies beating earnings expectations. On the
revenue side, total revenues are down 3.8% and only 38% of the companies are
able to beat revenue expectations. The growth rates look even weaker when
Finance is excluded from the aggregate numbers. Excluding Finance, total
earnings and revenues are down 6.9% and 4.9% from the same period last year,
The positive surprise from Cisco (Nasdaq:CSCO) aside, results from the Tech
sector have been quite weak this quarter, as we have seen in reports from a
host of bellwethers show. Total earnings for the 87% of Tech sector companies
that have already reported results are down 4.3% from the same period last
year, which compares to 9.2% positive growth rate for the same group in the
oThe bulk of the third-quarter 2012 reporting season is now behind us, with
results from 460 companies in the S&P 500 already out. Overall results are
weaker than what we have been seeing in quite a while.
oTotal earnings for these companies are down 2.2% from the same period last
year, with only 62.6% of the companies beating earnings expectations.
oTotal revenues are down 3.6% and only 38% of the companies have come out
with positive revenue surprises.
oUnlike recent quarters, results from the Tech sector have been
disappointing. Cisco's positive surprise stands in contrast to
disappointing results from industry leaders like Amazon (Nasdaq:AMZN),
Google (Nasdaq:GOOG), Apple (Nasdaq:AAPL) and Intel (Nasdaq:INTC) show.
Total Tech earnings are down 4.3%, with only 61.7% of them beating
earnings expectations; a significantly weaker performance than we have
been seeing from the sector in recent quarters.
oFinance and Construction are the only sectors with double-digit earnings
growth in the quarter, with Finance earnings up 23.3%. Excluding Finance,
total third quarter earnings for the S&P 500 would be down 6.9%.
oBasic Materials is the weakest, both in terms of growth as well as
negative surprises. Energy is a close second in terms of earnings growth,
with total quarterly earnings down 19.8%.
oThe composite earnings growth rate, combining the reports that have come
out with those still to come, for the third quarter is for flat growth for
the S&P 500 as a whole and a decline of 4% excluding Finance.
oUnlike the third quarter, estimates for the following quarter remain quite
strong, though they have come down in recent days. Total earnings expected
to be up 3.5% in the fourth quarter at present, which is a drop from the
7%-plus growth rate expected at the start of the third quarter reporting
oNet margins are barely up in the aggregate, but declining once Finance is
excluded. Nine of the 16 sectors have negative margin comparisons in the
third quarter, including Tech.
oTotal earnings for the full years 2012 and 2013 are expected to be up 5%
and 11% respectively. Revenues are expected to be essentially flat this
year (down 0.8% %), but up 3.6% in 2013.
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Contact: Sheraz Mian
SOURCE Zacks Investment Research, Inc.
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