Q1 earnings season is wrapping up with 92% of the S&P 500 having already reported their earnings.
“In aggregate, companies have exceeded EPS estimates, modestly missed on revenues, and continued to issue negative guidance,” notes Morgan Stanley’s Adam Parker.
Regarding that last point, Parker adds that the negative-to-positive guidance ratio is at a multi-year high of 4.1. The average since Q1 of 2005 is 2.4.
“Negative 2013 guidance has driven analyst estimates lower,” said Parker. “Over the past month, analysts have revised down their 2013 S&P 500 estimates 0.3%.
As you can see from the chart, the outlook for earnings has only been going down.
“We expect S&P 500 EPS of $103 and $110 in 2013 and 2014, well below consensus estimates of $111 and $124,” added the bearish Parker.