Closing Bell

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Closing Bell

Analysts Predict Modest But "Solid" Growth

Researchers from Thomson Financial and Zacks Investment Research agree: earnings growth for 2007 will probably be -- OK.  They joined "Closing Bell" to weigh in on the lukewarm year ahead -- and where investors might still find those double-digit treasures.

Tiffany Earnings

Michael Thompson, managing director of global research at Thomson Financial, said his firm's first-quarter growth prediction of 4.4% -- revised from 8.7% -- "probably" represents a normal reversion to mean. But he sees a "real conservativism" in corporate guidance to Wall Street. However, he told CNBC's Maria Bartiromo that while the current pullback was to be expected, he nonetheless detects a "surprise in the making," probably to the tune of 7% or 8% by year's end.

Dirk van Dijk, director of research at Zacks Investment Research, "basically agrees" with Thompson, noting that in each of the last four quarters, there have been "three times as many positive surprises as negative ones." He foresees that this fiscal year will continue to deliver more positive than negative developments -- "but not quite at that three-to-one ratio."

Van Dijk broke with Thompson's assertion that tech will see 11% quarterly growth (year-over-year), but agreed that consumer staples will scratch that double-digit level. The Zacks director declared that health care looks "solid," and matterials and industrials look "okay."