Earnings

Highlights from Thomson Reuters "This Week In Earnings Report". 

• Second quarter earnings are expected to grow 4.8% over Q2 2012.

• Of the 496 companies in the S&P 500 that have reported earnings to date for Q2 2013, 66% have reported earnings above analyst expectations. This is higher than the long-term average of 63% and is below the average over the past four quarters of 67%.

• 54% of companies have reported Q2 2013 revenue above analyst expectations. This is lower than the long-term average of 61% and higher than the average over the past four quarters of 48%.

• For Q3 2013, there have been 89 negative EPS preannouncements issued by S&P 500 corporations compared to 18 positive EPS preannouncements. By dividing 89 by 18, one arrives at an N/P ratio of 4.9 for the S&P 500 Index.

• The forward four-quarter (Q213 - Q114) P/E ratio for the S&P 500 is 14.5.

• During the week of September 16, 4 S&P 500 companies are expected to report Q2 2013 earnings.

My comment:  A 14.5 current PE on four quarter forward S&P 500 earnings implies a consensus earnings estimate out to July of 2014 of around $116.25-116.50.  That seems high to me but if it pans out fair value of stocks would be 1804 by my work.  Not saying we're going to get there but that's what the math says is possible.

Long ETFs related to the S&P 500 in client and personal accounts. 

Posting Schedule:  I was supposed to be out today but my schedule had to be changed.  I will instead be out tomorrow and perhaps one more day this week.  I will let you know in advance.