Q1 Earnings Forecast Goes Negative
Here we go again.
Analysts now expect earnings to decline in the first quarter of 2008.
Today, Thomson Financial's earnings growth consensus for the S&P 500 fell to -0.1 percent.
On Jan. 1, analysts expected growth of 5.7 percent On Oct. 1, it was 10.6 percent.
The main drag on earnings continues to be the financial sector.
Forecasts are for a 23 percent decline in financials' profits. On Jan. 1 consensus was an 11 percent decline and on Oct. 1 analysts called for a 5 percent increase.
Excluding financials, the growth forecast jumps to +9.0 percent.
However, other sectors are softening as well. Consumer discretionaries are also expected to decline 4 percent, a big drop from +8 percent consensus on Jan. 1 and a +18 percent forecast on Oct. 1.
Profits in the materials sector is also expected to fall by 3% versus a forecast of 7 percent increase on Jan.1 and 9 percent increase on Oct. 1.
Here's the sector-by-sector breakdown:
Source: Thomson Financial
The market has hit the Financial Sector the most in the past three months. Leading the Financials to the downside in the past 3 months are:
- MBIA down 67%
- Ambac Financial down 64%
- Sallie Mae down 45%
- MGIC Investment Corp down 44%
- Countrywide Financial down 35%