Will investors top analysts?
By Barbara C. Costanza, CBS.MarketWatch.com
Last Update: 1:22 AM ET July 15, 2001
LOS ANGELES (CBS.MW) -- The powerful stock market rally late in the week was, in part, the result of a mixed bag of earnings with many of those earnings coming in slightly higher than the average of analysts' estimates. The rally may be a clear indication that investors are confident that earnings, albeit bad, are not as bad as analysts were expecting.
And WhisperNumbers.com lends credence to that theory with its investor consensus estimates. As illustrated by the data below (supplied by WhisperNumbers.com,) it appears that, in general, the average investor is a bit more optimistic than analysts.
Stock Report date Analysts'estimates Investors'estimates Actual
GE 7/9 .39 .41 .39
RATL 7/11 .07 .08 .08
YHOO 7/11 .00 .02 .01
RBAK 7/12 -.28 -.15 -.26
HDI 7/12 .35 .45 .38
Investor optimism ahead
So what's on tap for optimistic earnings-minded investors this upcoming week? Well, among many others, Intel (INTC: news, msgs, alerts) , AOL (AOL: news, msgs, alerts) and Microsoft (MSFT: news, msgs, alerts) .
Intel is set to report second-quarter earnings Tuesday. The 24 analysts polled by First Call/Thomson Financial currently expect a profit of about 10 cents a share, with revenue of about $6.3 billion, while 28 analysts surveyed by Multex expect earnings of about 11 cents, on revenue of about $6.34 billion.
Then there is media giant AOL, which is set to report second-quarter earnings Wednesday. Twenty-seven analysts polled by First Call currently expect a second-quarter profit of 28 cents a share, while 31 analysts polled by Multex currently expect a profit of 29 cents a share. As for the average investor, optimism prevails with an estimate of about 30 cents a share.
As for revenue, analysts polled by First Call anticipated the company to post about $9.73 billion and analysts polled by Multex are looking for $9.71 billion. The average investor held back on a revenue estimate for the media giant.
Microsoft, set to report fourth-quarter earnings Thursday, advised Wednesday that it would take a huge charge that would knock its per-share earnings to 1 cent, with revenue between $6.5 billion and $6.6 billion.
Ahead of that announcement, the software behemoth was expected to earn 42 cents, according to the 24 analysts polled by First Call. The revenue expectation stood at $6.46 billion. The 30 analysts polled by Multex also anticipated a profit of 42 cents, with revenue totaling about $6.43 billion.
And yet again, the individual investor, on average, was slightly more optimistic than analysts with an earnings per share estimate of 44 cents. As for the revenue estimate, individual investors were looking for about $6.4 billion.
Hints of change
Through the decades investors have relied on the knowledge and wisdom of Wall Street analysts when it came to corporate financial estimates. However, times are changing, as faith in analysts seems to dwindle. It may be true that investors are losing confidence in the age-old system but the systems isn't dead and buried yet.
Keep in mind that there are still more analysts putting out estimates on more companies than the average investor tracks. The majority of the individual investors registered at WhisperNumber.com put in estimates on only top companies.
However as "mainstream" stocks lose investor's interest, "new" stocks appear on the Web site -- companies that WhisperNumber has never seen any expectations for in the past.
Big players set to report
Monday might be called money Monday with reports from Citigroup (C: news, msgs, alerts) , BankAmerica (BAC: news, msgs, alerts) , Bank of New York (BK: news, msgs, alerts) and Fifth Third Bancorp (FITB: news, msgs, alerts) . Others set to report Monday are Continental Airlines (CAL: news, msgs, alerts) , Novellus Systems (NVLS: news, msgs, alerts) , Handspring (HAND: news, msgs, alerts) , IMS Health (RX: news, msgs, alerts) and Unisys (UIS: news, msgs, alerts) .
For Tuesday, high profile companies reporting include Apple Computer (AAPL: news, msgs, alerts) , Fannie Mae (FNM: news, msgs, alerts) , Biogen (BGEN: news, msgs, alerts) , AmSouth Bancorp (ASO: news, msgs, alerts) , Caterpillar (CAT: news, msgs, alerts) , Capital One Financial (COF: news, msgs, alerts) , Delta Air Lines (DAL: news, msgs, alerts) , Diamond Offshore Drilling (DO: news, msgs, alerts) , Johnson & Johnson (JNJ: news, msgs, alerts) , Mellon Financial (MEL: news, msgs, alerts) and Veritas Software (VRTS: news, msgs, alerts) .
Some big names set to release quarterly results Wednesday are Applied Micro Circuits (AMCC: news, msgs, alerts) , EMC (EMC: news, msgs, alerts) , Tellabs (TLAB: news, msgs, alerts) , Burlington Resources (BR: news, msgs, alerts) , Cerner (CERN: news, msgs, alerts) , i2 Technologies (ITWO: news, msgs, alerts) and US Airways Group (U: news, msgs, alerts) .
Barbara C. Costanza is earnings editor of CBS.MarketWatch.com, based in Los Angeles. |
