Analyst earnings estimates can be hazardous to your financial health.
Of the 77 Big Boyz, 76 have reported their earnings for the quarter ending in June 30, 2001. One must wonder about the antique accounting system PG utilizes to collect its financial information.
I had become somewhat bullish the end of June as I noted that the ANAL-yst median earnings estimates for the June quarter were projected at .53, or some 18% above the actual results for the quarter ending June, 2000. The actual median earnings came in at .29 or a staggering 36% below last year. Certainly, this decline does not represent a healthy financial picture for corporate America. I would postulate that the Market environment will not improve until investors witness an actual improvement in these results. To this point, talk has been cheap.
I'm hearing more comments on the TeeVee regarding earnings estimates for the third and fourth quarters. In as much as the ANAL-ysts have bought hook line and sinker into corporate America's presentation of pro forma, normalized, recurring, operating, EBITDA, and rationalized earnings (some of the terms I read while looking at the earnings reports of the Big Boyz), I will view all these estimates for what they are: BS.
We have witnessed some incredible write-offs of prior investment mistakes; however, I believe that it only represents the tip of the iceberg. Until we see real earnings growth, any rally should continue to be viewed as suspect. I don't believe there is any concern for "missing the train" until we witness an actual earnings improvement. Talk is cheap.
Just A View from the Swamp
TB |
