This is our short term rating system that serves as a timeliness indicator for stocks over the next 1 to 3 months. How good is it? See rankings and related performance below.
|Zacks Rank||Definition||Annualized Return|
Zacks Rank Education - Learn more about the Zacks Rank
Zacks Rank Home - All Zacks Rank resources in one place
Zacks Premium - The only way to get access to the Zacks Rank
This page is temporarily not available. Please check later as it should be available shortly. If you have any questions, please email customer support at email@example.com or call 800-767-3771 ext. 9339.
For Immediate Release
Chicago, IL – January 21, 2013 – "Zacks Director of Research, Sheraz Mian, says low expectations for this earnings season were set by the very weak third quarter reporting."
Q4 Earnings Largely Uneventful Thus Far
The fourth quarter earnings season hasn’t been that eventful thus far even though we have results from 67 S&P 500 companies already (as of Friday, January 18th). The reason is that expectations for this earnings season were set by the very weak third quarter reporting season. Given those low expectations, the actual performance is a tad bit better relative the third quarter, though it remains sub-par relative to the last 6 to 8 quarters.
Total earnings for the 67 S&P 500 companies that have already reported results are up +15.6% from the same period last year, with 59.7% of the companies beating expectations with a median surprise of +2.3%. Revenues are up +5.8%, with 40.3% of the companies beating top-line expectations and a median revenue surprise of +1%. All of that growth is coming from the Finance sector, with strong earnings growth at JPMorgan (JPM - Analyst Report), Wells Fargo (WFC - Analyst Report), Goldman Sachs (GS - Analyst Report) and Morgan Stanley (MS - Analyst Report) more than offsetting the weakness from Bank of America (BAC - Analyst Report). Excluding Finance, total S&P 500 earnings are essentially flat (up only +0.1%).
Combining the reports that have come out with the bulk of the reports still to come, the composite fourth quarter earnings growth rate is up +1.5%. The actual dollar amount of fourth quarter earnings is the lowest quarterly total in 2012. But the expectation is for earnings growth to resume from the second quarter of 2013 and increase materially in the back half of the year.
I have been skeptical of those growth expectations for awhile now, but that’s exactly what the market is pricing at present. We have started expectations for 2013 come down a bit, but there is likely much more room to go.
Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: http://at.zacks.com/?id=7160
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.
Then, when changes are discovered, they’re applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.
The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription at http://at.zacks.com/?id=5187
Follow us on Twitter: http://twitter.com/ZacksResearch
Join us on Facebook: http://www.facebook.com/ZacksInvestmentResearch
Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Contact: Sheraz Mian
Please login to Zacks.com or register to post a comment.