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Pastimes : Clown-Free Zone... sorry, no clowns allowed -- Ignore unavailable to you. Want to Upgrade?

To: MythMan who wrote (251630)	7/23/2003 9:51:25 AM
From: zonder	Respond to of 436258

SHOULD WE BE GETTING EXCITED OVER THE EARNINGS REPORTING SEASON? [A note from Merrill Lynch this morning] In a word -- no. Yes, according to First Call, of the roughly 200 S&P 500 companies reporting, only 12% have fallen short of estimates versus an average of 21% over the past decade. Fully 76% have topped or met analyst expectations in the lead-up to reporting season (up from 67% in Q1), but let's face it -- at 5.8% y/y, the high-bar was set pretty low to begin with. And keep in mind that at the start of the year, the consensus for Q2 was +10.9% -- and the risk is that growth comes in slightly below that when all is said and done. Here's the story beneath the headline: * Based on our tally, 40% of S&P 500 companies have reported, and earnings are +11.5% y/y for these companies. According to First Call, companies thus far have beaten their estimates by 5.6%, down from 6.2% in Q1 but above the 10-year average of 2.8%. * Note, however, that the first-to-report companies tend to be the fastest-growing ones, so if the rest of the group comes in as-expected, this earnings season will produce a +9.7% quarter on a y/y basis. Better than beaten-down expectations, but still slower than the dollar-induced 11.7% gain in Q1. * But it has been the financials doing all the heavy lifting (on the back mostly of what was a booming Treasury market, still-solid credit growth and reduced costs) -- EPS up 22.6% y/y against expectations of +14.9%. * Ex-financials, total EPS growth is running at the grand total of +4.2%, and if all companies that have yet to report come in-line, then ex-financial earnings growth will come in at +1.9% y/y. IT is behind schedule at +15.1%(+18.9% was expected -- but there's another 25% share of the universe to report) and consumer cyclicals (-17.3% y/y was expected -- group is coming in now at -18.4% and looking at whose left to report, we think the final figure could come in as weak as -25%). In addition to financials, we have seen energy, materials, health care, consumer staples and industrials all come in better than expected. * We estimate that 60.8% of the 199 reporting companies we have tracked this far have come in above consensus. Once the mighty financials are stripped out, that number falls to 57.6%. * We estimate that 67.8% of companies reporting so far have posted POSITIVE y/y EPS growth; that number falls to 63.6% once financials are stripped put. That means that more than 1/3rd of the ex-financial universe is actually posting decelerating earnings growth in Q2! Only 44.7% of the consumer discretionary group is seeing faster earnings growth; only 64.9% of IT companies are too. The best are financials (100%), followed by health care (87.5%) and energy (80%).

To: MythMan who wrote (251630)	7/23/2003 9:54:08 AM
From: Bid Buster	Read Replies (2) \| Respond to of 436258

nice pop..but talk about lowered growth!..all anyone cares about is beating current lowered eps est. you jump on that turnip truck? -g-

To: MythMan who wrote (251630)	7/23/2003 11:03:10 AM
From: GraceZ	Read Replies (1) \| Respond to of 436258

The only thing driving that thing is the divi and you have to wonder how secure that dividend is (laying off 6,000 can't be done every year). The film based photography industry is moribund and it will continue to be moribund. They are doomed. Their digital products pretty much suck, their traditional product list which is ridiculously extensive will sink them while they can't replace it on the digital side because they are a slow moving beast with too many layers of management to compete with the faster more nimble camera and tech companies and there just isn't the huge dollar amount of consumables in digital that there is in film. Their digital printers suck (and are expensive) as well as their cameras. A tiny company, Ilford makes superior paper, Canon makes better cameras and printers. It would take a major shift in their mission to turn that company around, a near death experience. The yellow box no longer has much of a place in my biz. It's a shame because they are one of the few old style American companies. When you got a job at Kodak it was always a job you could keep for life. They made small market products that no one else would make because they kept a sort of contract with their customers to serve their needs regardless of whether or not those products made money for them. This is the practice which makes them less competitive, but the old film based imaging industry was always like that, when someone bought a certain device they could relax knowing that Kodak would continue to make the paper or film for that device no matter how obsolete it became. I'm still using developer that I learned to use 30 years ago even though they've put out a dozen new and improved developers.