Record S&P 500 Companies Warned in Q4
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Revenue Growth %: -44.8%
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Today's EPS Names:
CCEL, SLP, TMQ, More
Revenue Growth %: -44.8%
Financial Fact:
Net income attributable to DuPont: 2M
Today's EPS Names:
CCEL, SLP, TMQ, More
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Looks like the fourth-quarter might not shape up as well as had been previously expected.
According to data compiled by Barron's, a total of 96 S&P 500 companies have revised fourth-quarter outlooks lower, while just 27 have an improved outlook. Notably, the number of downward revisions is at its lowest point since 2001, during the economic recession.
The Street consensus is looking for an 8.5 percent increase in fourth-quarter profits, to an average of $24.44, compared with 2010. But Barron's noted that estimates were as high as 15 percent in October, meaning analysts have cut expectations by nearly half across the covered market.
Leading the charge higher is the energy sector, with year-over-year growth expectations of 23.9 percent, followed by financials at 12.8 percent.
Telecommunications Services will see a 14.1 percent dip, while Materials will drop 8.4 percent over the same period last year.
Factors contribution to the new outlook include worsening data out of Europe through the quarter, as well as slowing emerging market growth like what can be seen in China.
Barron's cites a few examples as well. In early December, E.I. du Pont de Nemours (NYSE: DD) cut its outlook stemming from slower than expected consumer electronics sales as well as lower housing starts. Then, Texas Instruments (NYSE: TXN) signaled ebbed demand across end markets with its lowered outlook. Last week, Illinois Tool Works (NYSE: ITW) issued in-line fourth-quarter guidance, but sent an ominous message that Europe still looks challenging.
Oh, and stocks look cheap, with the S&P trading for 11.8 times expected 2012 earnings on average.
What's a strategy moving forward? Well, energy prices are likely to stay high, particularly crude. Earlier in December, OPEC kept oil production caps rather tame, at about 30 million per day, throwing some caution into the numbers. Should a global recovery take hold, prices for crude could shoot well above the $100 per barrel level that they're at currently.
Also, Barron's cites a recent note from S&P's senior S&P 500 index analyst, who said that cash will remain king moving forward, as companies will have enough on the books to do whatever they want: buybacks, dividends, M&A, hiring, etc.
So, Barron's suggests to look for companies with heavy cash balances relative to historical levels, as well as high yields on distributions or buybacks.
Markets are higher overall Thursday, heading into the last trading session for 2011. Fourth-quarter earnings might start in the second week of January, right when Alcoa (NYSE: AA) should report its numbers.
According to data compiled by Barron's, a total of 96 S&P 500 companies have revised fourth-quarter outlooks lower, while just 27 have an improved outlook. Notably, the number of downward revisions is at its lowest point since 2001, during the economic recession.
The Street consensus is looking for an 8.5 percent increase in fourth-quarter profits, to an average of $24.44, compared with 2010. But Barron's noted that estimates were as high as 15 percent in October, meaning analysts have cut expectations by nearly half across the covered market.
Leading the charge higher is the energy sector, with year-over-year growth expectations of 23.9 percent, followed by financials at 12.8 percent.
Telecommunications Services will see a 14.1 percent dip, while Materials will drop 8.4 percent over the same period last year.
Factors contribution to the new outlook include worsening data out of Europe through the quarter, as well as slowing emerging market growth like what can be seen in China.
Barron's cites a few examples as well. In early December, E.I. du Pont de Nemours (NYSE: DD) cut its outlook stemming from slower than expected consumer electronics sales as well as lower housing starts. Then, Texas Instruments (NYSE: TXN) signaled ebbed demand across end markets with its lowered outlook. Last week, Illinois Tool Works (NYSE: ITW) issued in-line fourth-quarter guidance, but sent an ominous message that Europe still looks challenging.
Oh, and stocks look cheap, with the S&P trading for 11.8 times expected 2012 earnings on average.
What's a strategy moving forward? Well, energy prices are likely to stay high, particularly crude. Earlier in December, OPEC kept oil production caps rather tame, at about 30 million per day, throwing some caution into the numbers. Should a global recovery take hold, prices for crude could shoot well above the $100 per barrel level that they're at currently.
Also, Barron's cites a recent note from S&P's senior S&P 500 index analyst, who said that cash will remain king moving forward, as companies will have enough on the books to do whatever they want: buybacks, dividends, M&A, hiring, etc.
So, Barron's suggests to look for companies with heavy cash balances relative to historical levels, as well as high yields on distributions or buybacks.
Markets are higher overall Thursday, heading into the last trading session for 2011. Fourth-quarter earnings might start in the second week of January, right when Alcoa (NYSE: AA) should report its numbers.
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