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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: GuinnessGuy who wrote (4238)	6/6/1998 6:14:00 PM
From: Snowshoe	Read Replies (1) \| Respond to of 9980

>>Does anyone know of a site which tracks earnings warnings as a regular feature of the site? Something really comprehensive?<< Briefing.com began tracking these last quarter. I get free access via Schwab which does not include this quarter's data for that feature. However, they did provide a link to last quarter that will probably work for anyone. It can be sorted by date, industry, or sector... briefing.com They have a free trial offer you might look into. -Greg

To: GuinnessGuy who wrote (4238)	6/8/1998 5:06:00 PM
From: MikeM54321	Read Replies (2) \| Respond to of 9980

Re: Asia Warnings I keep wondering if we are going to be getting a rash of warnings soon? I thought it would be happening by now but doesn't appear to be as nearly as hot and heavy as in December and January. It's still a little early, I suppose. Interesting article I found (on semi-board) concerning how analyst treat "bad news." MikeM(From Florida) PS I noticed someone said something bad about Intel earnings and sales for Q2 today, but didn't downgrade it. Interesting. >>By GRETCHEN MORGENSON NEW YORK -- Talk about denial. Even as more and more corporate managers warned that their second-quarter results were looking grim, investors piled into the stock market. And they piled most heavily into those companies most vulnerable to near-term earnings disappointments -- the technology group. For the second quarter of this year, more of these so-called pre-announcements are not only coming in early, they are coming in ugly. As of Thursday, according to Chuck Hill of First Call, which tracks company earnings, 139 companies had publicly given an overview of their second-quarter results. Considering that we still have four weeks to go before second quarter results actually start trickling in, we are running well ahead of where we were last year at this time. That's the early part. Now for the ugly. Of those companies pre-announcing, 58 percent have warned that their earnings will be lower than analysts are estimating. After Thursday's close, for example, Motorola said it was taking a $1.95 billion charge against second-quarter earnings and would report an operating loss. That 58 percent number should raise an eyebrow, according to Hill. e said the split between negative and positive guidance on earnings was usually 50-50. Neither fact from First Call bodes well for the overall market. But the data is particularly ominous for technology stocks. Managements of these companies are the bulk of those issuing warnings. Double denial. These are just the stocks that rallied on heavy buying Thursday. The Standard & Poor's High Technology Composite index rose 2.2 percent Thursday as investors grabbed anything they could in stocks of semiconductor makers, networking companies, personal computer companies and other hardware manufacturers. What gives? Even as grim news continues to come from technology concerns, investors seem to think that all the bad news for the industry is already reflected in these companies' stock prices. In just the last few days, earnings warnings or other gloomy talk have come from technology companies as varied as Motorola; Komag Inc., a disk-drive manufacturer, and Integrated Device Technology, an integrated circuits maker. This on the heels of worries from industry giants like Analog Devices, which makes integrated circuits; Applied Materials, a manufacturer of semiconductor wafers, and AMP Inc., the world leader in connectors. These stocks might indeed be cheap if one could be certain that any bad news about their industry or their businesses was already reflected in their prices. But given how glacially analysts respond to bad news, this is highly unlikely. Everybody knows that Wall Street analysts accentuate the positive. And they are not disappointing us now. Earnings at technology companies, these perennial optimists believe, will rebound nicely in the third and fourth quarters. Consensus expectations for third-quarter earnings on First Call's composite of technology companies are an increase of 21 percent. The herd thinks fourth-quarter earnings will rise 15 percent. The only trouble with buying this argument is that analysts' opinions, not completely reliable in good times, are exceedingly untrustworthy in bad times. Wall Street analysts appear to be constitutionally unable to help investors face anything but the cheeriest music. This is not just opinion. A research paper on momentum investing strategies found that analysts are slow to revise their expectations for a company in the face of bad news --just when you need them most. Bottom line? If you follow the advice of Wall Street analysts on your investments, don't think for a moment you'll get the whole truth from them when times are tough. Mark Hulbert, editor of the Hulbert Financial Digest, which assesses the performance of investment newsletters, said: "Bad news rarely comes out in full. Instead it comes out in dribs and drabs. There's a very good likelihood that the first downward earnings revision from an analyst will be followed by another and another and another." Call it Wall Street's version of Chinese water torture.<<--Interesting choice of words! :)