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Strategies & Market Trends : Market Gems:Stocks w/Strong Earnings and High Tech. Rank -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (118593)	12/10/2000 4:31:58 AM
From: Jenna	Respond to of 120523

Barrons.. On Earnings BARRON'S: Horror Story: Are The Serial Earnings Slashings Almost Over On Wall Street? By Jonathan R. Laing (Excerpts).. .....Moreover, analysts are putting the meat cleaver to 2001 earnings growth estimates for the S&P 500. Since July, the growth forecast has contracted from 15.5% to 10.7%. Expect more bad news. Analysts tend to extrapolate earnings problems out only a quarter or two and leave alone estimates for periods in the more distant future. First Call earnings-growth estimates for the first and second quarters are currently below the 2001 number, at 9.5% and 8.6% respectively. Hill thinks these two quarterly growth numbers could be revised downward to the "mid- to low single digits." The earnings revisions began in earnest in October, according to Hill. "It was then that the earnings cuts seemed to fan out far beyond consumer cyclical industries like autos and the raw material sector to technology and other areas thought to be largely immune from any Fed-induced economic slowdown," Hill opines. "For a time we thought the earnings cuts were episodic, short-term problems, specific to individual companies. But the problems kept fanning out to a wider array of companies. It has become a virtual free fall in earnings expectations." ......................... It remains to be seen whether current stock prices not only fully reflect the earnings declines already predicted but also any further earnings cuts yet to come. Hill, for one, isn't sure. But at least he sees some near-term relief during the month of December to the relentless pounding that has been visited on stocks of late. For one thing, he expects fewer earnings pre-announcements, negative or positive, as the holidays approach. Company officials tend to honor the holiday spirit and refrain from putting lumps of coal in shareholder stockings. This year's fourth quarter has seen a 58% jump over last year in such pre-announcements. Hill ascribes this jump to a combination of factors, including the deteriorating earnings environment and the SEC's newly implemented Fair Disclosure Regulation. Companies with market-moving earnings news seem far quicker to disclose it than in the past. Nevertheless he expects the surge in earnings revisions to resume in the first several weeks of January, just after the fourth-quarter reporting period ends for most companies. "I'd advise people to buckle their seat belts when they return from the holidays, because they could be in for a wild time," he says. ......................... "Markets always turn up well before the bottom in earnings is reached. But investors will have to have some visibility as to when and how deep the bottom will be," Hill explains. Just maybe, the worst is over on the earnings revision front.