“NEW YORK (MarketWatch) — Expect tepid earnings for the reporting season that kicks off Tuesday, say Wall Street analysts who have grown increasingly pessimistic over the past three months.
Fourth-quarter earnings for S&P 500 SPX -0.44% companies are expected to grow 2.8% compared to the same period in 2011, according to Thomson Reuters data. But keep in mind that this estimate has dropped from 9.9% at the beginning of the quarter to 2.8% today.
In keeping with tradition, aluminum producer Alcoa Inc. AA -1.19% will unofficially kick off earnings season with its results on Tuesday after the market closes. Alcoa’s results notwithstanding, a number of companies have actually already reported results in the so-called preseason.
And 62% of the 21 companies that have already reported fourth-quarter earnings to this point have topped analyst estimates, matching the long-term average beat rate, according to Thomson Reuters.
“If it should continue at the rate of 62%, the blended earnings growth estimate will likely improve slightly as more companies beat estimates than miss them,” Thomson Reuters analysts wrote in a report. “This would fit in with what analysts see as a slow emergence from the earnings trough in the third quarter, with single-digit earnings growth to finish out 2012 and during the first half of 2013…..”
If you enjoy the content at iBankCoin, please follow us on Twitter
