Wednesday, April 22, 2009

Earnings Update

All the bearish analysts were coming on t.v and in the news saying that the stock market was going to a huge dip because earnings were going to be so bad that firms would not be able to come close to expectations. The market will never bottom until earnings expectations come down far enough where companies can beat them. Well, it seems that time has arrived. So far of the S&P 500 companies, around 60% have beat the earnings estimate. Revenue has really taken a hit, and it many cases companies are not living up to the revenue expectations, but the important thing here is that the companies are becoming more efficient. Their eps are beating expectations because of cost cutting measures, and that is what you want to happen in a recession. You want consolidation and you want companies to cut excess costs.  Now, also along with the earnings, we have been seeing pretty good guidance. The overall tone has been either that sales are going to improve this year, or that at worst we have already seen a bottom.

You can take a look at some of the earnings companies have posted at CNBC.

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