Investor Agenda

Earnings Scorecard


The earnings parade continues for the third quarter. Add Apple , Caterpillar and DuPont to the list of companies that have beat the analysts' estimates in the third quarter.

Today’s big name: Yahoo! is due out after the bell. We’ll have to wait and see if it can continue the earnings momentum for the technology sector.

Analyst forecasts aren’t counting on a strong third quarter from Yahoo. A Thomson Reuters survey predicts net revenue of $1.12 billion, down from $1.33 billion in the same period a year ago. Analysts say much of that loss is due to the recession and its effect on online advertising. But not all Yahoo-watchers are in the same camp.

“Yahoo’s share of Internet usage minutes has been stable and…[it] stands to gain from trends indicating that internet ad budgets in both search and display will experience cyclical recovery in the seasonally strong Q4”, writes GVA Research Principal David Garrity. He also points to Yahoo’s exposure to Asia through Yahoo Japan and China’s as positives for the Internet search company.

So is that view correct, or is a more bearish outlook in order? We’ll have answers when Yahoo releases earnings. Mr. Garrity, along with CNBC Silicon Valley Bureau Chief Jim Goldman, will share their thoughts with Maria during the 4pm ET hour of The Closing Bell.

Looking at the rest of the week, with nearly half of the Dow components and more than a quarter of the S&P 500 reporting, how does the earnings scorecard look?

Here's an earnings cheat sheet from Robert Keiser, Senior Director at Standard and Poor's:

  • 84% of S&P 500 companies are beating/meeting consensus expectations, 16% have missed
  • Hardly surprising considering that Q3 earnings expectations have dropped to $15 per share at the end of Q3 from $20 at the start of Q1

So why are analysts so off the mark when it comes to earnings predictions? Are the estimates on the low on purpose… so companies can beat it?

Chris McHugh, Senior Portfolio Manager of the Turner Mid-Cap Growth Fund said earnings revisions were impacted greatly by the credit crisis last year, with many revisions to the downside. He cited Apple, a company that continues to outperform, regardless of expectations.

We'll dig deeper into the earnings picture and where you should be putting your money with Keiser & McHugh at 3pm ET on the Closing Bell.

John Cook and Liza Tan contributed to this article. 



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