2009-11-24 23:05:03 -

Zacks Research Equity Strategist, Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.



Be Thankful for a Strong Earnings Season

The broad increases in earnings estimates seems to reflect a much better short-term outlook for the economy. Note that some of the most cyclical areas such as Retailers, Materials and Autos are seeing a large preponderance of upward over downward earnings revisions, and that most of the firms in those sectors are seeing their consensus estimates increase.

On the other hand, the defensive Staples sector has a very high revisions ratio of 8.55, so it’s not just the cyclicals. Then again,

given the great performance by the Staples on the surprise front, a strong estimate revisions performance is not surprising.

One industry that has seen some remarkable increases in their estimates for both this year and next is the Semiconductor Equipment industry, with firms like Applied Materials (Nasdaq: AMAT : ), KLA-Tencor (Nasdaq: KLAC : ) and Novellus (Nasdaq: NVLS : ) all seeing no estimates cut and double-digit numbers of increases leading to very large percentage gains in their mean estimates. Those are what one might term new economy cyclicals. Many of the old economy cyclicals like Ford (NYSE: F : ) and Cummins Engine (NYSE: CMI : ) have also seen large estimate increases.

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Zacks.comDirk Van Dijk, CFAPhone: 312-265-9211Email: pr@zacks.com : mailto:pr@zacks.com Visit:
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