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Strategies & Market Trends : Market Gems-Trading Strong Earnings Growth and Momentum -- Ignore unavailable to you. Want to Upgrade?

To: Jenna who wrote (6356)	3/12/2001 11:43:34 AM
From: ColtonGang	Respond to of 6445

Kerschner lowers S&P estimates UBS Warburg's Ed Kerschner lowered 2001 operating earnings-per-share on S&P 500 companies to $54.50 from $56.50, with the chief strategist indicating that the U.S. economy hit the "proverbial brick wall over the past few months." He said that S&P earnings should rebound over 10 percent to $61.00 next year. Kerschner said the decline in earnings for the first half of the year will be steeper than originally expected -- with first-quarter earnings seen down 15 percent against tough year-ago comparisons. The UBS strategist noted that the debate over whether the U.S. economy is in a recession is purely academic from an earnings standpoint. "Earnings are currently holding up fairly well in non-cyclical areas, but they are plunging in technology, commodities and consumer cyclicals. Next year, with the non-cyclical areas still growing nicely, some of the cyclical sectors should produce impressive gains of 10 to 30 percent vs. easy comparisons," Kerschner said in a research note. Checking individual sectors, Kerschner said telecom estimates are still falling fairly rapidly -- even though they have been weak for a year now-- with first-quarter earnings seen down 31 percent. Technology is very weak, he added, with estimates plunging and the first-quarter likely to be down 30 percent against tough year-ago comparisons. Energy remains a very bright spot, with first-quarter earnings expected to be up nearly 45 percent.