DJ Fund Managers Upbeat On US Cos' Profit Growth - Merrill
05/13/2003
Dow Jones News Services
(Copyright © 2003 Dow Jones & Company, Inc.)
LONDON (Dow Jones)--Fund managers around the world were encouraged by first-quarter earnings posted by U.S. companies, but remained cautious on economic growth, Merrill Lynch (MER) said Tuesday in its monthly survey of investor sentiment.
The bank polled 300 fund managers from May 1 to May 8.
The executives forecast an average growth in earnings per share of 8% over the next 12 months, up from 6% forecast in the March and April surveys.
There was also a major turnaround in the fund managers' perception of volatility in corporate earnings. Some 20% of respondents expect volatility to decline over the next 12 months compared with 43% of respondents in the April survey expecting an increase.
Following the first-quarter results season, the U.S. displaced the U.K. as the region with the best quality of earnings and the best profit outlook, regaining the position it lost a year ago after a series of corporate governance crises, said Merrill Lynch.
And, although fund managers are optimistic about global corporate growth, 75% of those polled expect this to be driven by cost-cutting rather than topline revenue.
Further, 51% of respondents reckon companies should be using cash flow to rebuild their balance sheets rather than increase capital spending.
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05-13-03 0959ET
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