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Christine Short, S&P Capital IQ, wraps up the earnings highs and lows from the third quarter, and gives her forecast for what’s ahead.
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The fourth quarter is raising concerns about economic growth more concerns joining us Christine short senior manager of global markets intelligence oppressive -- capital IQ Christine welcome to you.
Says it says they're corridor is winding down and while we were expecting a decline it wasn't bloodbath that a lot of people were expecting what happens it won't come back up like you said we were at one point section that the negative growth in.
-- continued throughout most of the season but we did see a lot of companies coming in beating estimates.
So now the S&P capital IQ estimate is up to 2.3 percent so.
Not spectacular but at least it's nice to see -- on the positive side of things rather negative.
About this culture of earnings reporting because it seems like a big tease among corporate America right it's like -- lower that bar.
Stay put it so low so that even if it does could mean bad it's not always as bad as he feared so -- here relieved -- happy is kind of like.
How do you.
Looking earnings and make Smart investment decisions when you know what they're forecasting isn't probably what's gonna happen anyway well you're right.
So we -- see companies guide they tend to got a little lower as we get closer to an earnings season analysts react to that they draw down their earnings and and inevitably companies and up you know beating and surprising -- tapping the stock at the pops up.
You're right you really have to take a look at those and determine you know -- how much they're beating by I think that's one metric that we go -- -- -- a penny or two.
Then we tend to think that companies purposely you know maybe in some cases lowered those estimates so it's really based on -- surprise.
How much they surprised by and then we also -- look at the revenue -- now.
Many companies -- revenue targets this quarter and that's become big concern over the last few corners of the week.
39% of companies beating revenue estimates so combine the conversations for me if you well.
Earnings growth vs the political climate are you seeing companies behave.
With the way they're spending their money.
Because of what's coming around the bend with the political landscape the fiscal -- -- that potential for higher taxes and health care not fat -- I think all of those things make a 2013 outlook very hard to -- because you're right we don't know what's happening with the fiscal -- and until we know what that decision -- Companies are very uncertain going -- 2013 because that's inevitably going to have a large impact.
Right now we're seeing in our stride on 2013 estimates -- a greater degree than they have all year.
And that's you know certainly concerning.
Looking back -- beginning of the year we're expecting 2013 to be the return to double digit earnings.
We're no longer seen that -- the first half looking for -- low single digit earnings.
-- if you pair that way if you know this once -- present GDP that we've seen 2012 -- Think that may continue into 2013 -- the climate stays the same we're also looking at lower earnings per share numbers 2526.
Which means -- could possibly see little to no growth throughout 2000 there I mean it's amazing as an analyst you feel that you're changing your forecast your expectations -- since the first of volatile climate right now now.
It's true -- -- we take our direction from what the company guidance of thing and you know this quarter we've seen a lot of negative guidance but we've.
I think more concerning that we have seen that much guidance we have 75 companies out of the 453.
That are reported.
Giving any sort of fourth quarter earnings guidance.
So that's only about 1617%.
Typically we see about 22 between 3% of companies giving any sort of guidance.
To me that says companies are so uncertain and there either giving very negative guidance of just choosing not to give any guidance for Christine.
And eating -- lay out all these different scenarios we know that if the economy does even slide off the fiscal -- the CBO warns it could fall back in the textbook recession two consecutive quarters of negative growth so is that what we're seeing companies set up for companies -- -- say that but they're right but they're certainly they're hedging -- saying look we're we're lowering guidance for both revenues and earnings.
We're prepared it's a difficult climate out there were prepared for 2013 to be.
You know not as great as expected.
-- chart thank you so much for analysis that was a great walking into your Internet company does it better yeah.
If they -- big and small were -- before the election about the cost of president Obama's health care plan.
Now that the president has been reelected how all employers be dealing with all that's out of Shapiro's covering the story any joy.
