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Zacks Earnings Trends Highlights: Apple, Google, Microsoft and Caterpillar


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For Immediate Release

Chicago, IL – February 8, 2013 – Zacks Director of Research, Sheraz Mian, says we have started to see expectations for 2013 come down a bit, but there is likely much more room to go.

Earnings Season Winding Down at Par

Combining the reports that have come out with the ones still to come, the composite fourth quarter earnings growth rate is +1.7%, which compares to a flat reading in the third quarter, but lower than what we have been seeing the quarters prior to that. 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. We have started expectations for 2013 come down a bit, but there is likely much more room to go.

Key Points

  • The bulk of the fourth quarter reporting season is now behind us, with results from 333 S&P 500 companies already out. These 333 companies account for 76.6% of the index’s total market cap and contribute 78.1% of the index’s total Q4 earnings.
  • Total earnings for these 333 companies are up +2.7%, a beat ratio of 67.3%, and median surprise of +3.2%. Total revenues are up +0.5%, beat ratio of 62.5%, and median surprise of +0.9%.
  • Finance is the key driver of growth, with total Finance sector earnings up +18.8% from the same period last year. Excluding Finance, total earnings would be down -0.3%.
  • Tech has been a laggard, with earnings growth almost non-existent and many of the industry leaders including Apple ((AAPL - Analyst Report)), Google () and Microsoft ((MSFT - Analyst Report)) coming short of revenue expectations. Total Tech sector earnings are up +2.4%.
  • Industrial Products is particularly weak, both in terms of growth as well as negative surprises. The weak comparisons are not limited to Caterpillar ((CAT - Analyst Report)), the issue is quite widespread, with the fourth quarter on track to be the weakest earnings season for the group in the last 8 quarters.
  • Combining the results that have come out with those still to come, the composite earnings growth rate for the fourth quarter is +1.7%, which compares to flat growth in the third quarter. Excluding Finance, the composite fourth quarter earnings growth rate drops to 0% (down -0.04%), compared to the decline of -4.1% for the ex-Finance group in the third quarter.

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Contact: Sheraz Mian


Phone: 312-265-9211





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