Zacks Earnings Trends Highlights: Ford, Cummins Engine, Eastman Chemical, International Paper and Freeport McMoRan - Press Releases
For Immediate Release
Chicago, IL – December 15, 2009 - 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.
Expect Strong Earnings Trends in 2010
Now it is time to turn our focus to the fourth quarter. Saying that the market as a whole faces easy year-over-year comps is a bit like Noah remarking that it looks like rain -- a huge understatement. Total earnings in the fourth quarter are expected to be more than double year-ago levels, up 116.4%. This is mostly due to very easy comparisons after last year’s disaster.
Because of the year-over-year distortion from the debacle that was last year’s fourth quarter, it is more instructive to look at the sequential growth (although keep in mind that some sectors, most notably Retail, are highly seasonal). There the picture is far more subdued, with total earnings in the fourth quarter actually expected to be 4.6% below third quarter levels. Although if we see even a normal amount of positive surprises, the level is probably going to be more like flat sequentially.
The overall picture for 2010 in terms of revisions is broadly similar to that of 2009. The most notable exception is for the Transports, which were on top for 2009 but at the very bottom for 2010. However in both cases, it is based on very few estimates actually being revised for the sector. The revisions ratios are most useful when they are based on a large number of revisions, so take the numbers for the small sectors like Transportation and Business Services with a grain of salt.
The strength in the Auto sector is really all about Ford (F) with a supporting role from Cummins Engine (CMI). The leaders in the Basic Materials sector include Eastman Chemical (EMN), International Paper (IP) and Freeport McMoRan (FCX).
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Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.zacks.com
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