“Corporate America is letting the sun shine in on second-quarter profit outlooks, raising hope that the first quarter’s storms are past.
Second-quarter outlooks for S&P 500 companies so far are much more optimistic than the past two quarters. Fewer companies are cutting estimates and those that are reducing forecasts haven’t done so as aggressively as in the past.
As a result, the market has rebounded from its recent selloff. The Standard & Poor’s 500 Index has climbed 3.5 percent in the last eight trading sessions, leaving it less than 1 percent from its all-time closing high.
“The downward revisions for the second quarter right now are very, very mild,” said Nick Raich, chief executive officer of The Earnings Scout, an independent research firm specializing in earnings trends, in Cleveland.
“That’s the positive for this earnings season.”
Negative outlooks still outnumber positive ones for the second quarter, but at a ratio of 2.9 to 1, they are well below the 4.7-to-1 ratio at a similar point in the previous earnings period and the 7.8-to-1 ratio for the one before that, Thomson Reuters data showed.
Surprisingly strong results have come from many high-profile names, including Apple, Caterpillar, Netflix and United Technologies.
That’s offset what Wall Street had expected to be a lackluster first quarter. Estimates were slashed, heading into this earnings period as the unusually harsh winter hampered transportation, kept people out of stores and raised heating costs….”
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