2012 S&P 500 Consensus Earnings Estimates Update

by Dr. Ed Yardeni, Yardeni Research

Another earn­ings sea­son is start­ing, and indus­try ana­lysts are prepar­ing for it by once again low­er­ing their esti­mates. And once again, this may set the stage for lots of pos­i­tive earn­ings sur­prises. How­ever, this time their down­ward revi­sions may reflect fun­da­men­tal weak­ness in busi­ness for com­pa­nies with expo­sure to Europe. In this case, there might be fewer pos­i­tive and more neg­a­tive surprises.

The con­sen­sus fore­cast for S&P 500 oper­at­ing earn­ings dur­ing Q2 fell to $25.45 per share dur­ing the week of June 14. That’s down $0.70 from the end of the pre­vi­ous earn­ings sea­son at the end of April. The esti­mates for Q3 and Q4 have also been revised down over this period by $0.51 and $0.40, respectively.

As a result, the esti­mate for all of 2012 is now down $1.24 since the end of April to a new low of $105.31. The 2013 esti­mate is also down to a new low of $118.18. That’s still above the $110 num­ber that Joe and I are using for next year. Since ris­ing to a new record high dur­ing the week of June 1, S&P 500 for­ward earn­ings has stalled around $110. (more)