Corporate 'Warnings' Season Is Underway And So Far It Stinks

Sad trader

Photo: AP

Q4 earnings season is over with 497 companies having announced their financial results.  For the record, 65 per cent of companies beat analysts’ estimates according to data compiled by FactSet.We have a few weeks before Q1 earnings season kicks off.  For now, it’s “warnings” season.

Warnings season is the period before earnings season when corporations confess their sins and announce earnings guidance that falls below analysts’ expectations.

So far, 69 of the S&P 500 companies have announced Q1 EPS guidance that was worse than analysts’ estimates, according to FactSet.  Just 39 companies have announced guidance better than estimates.

On the bright side, the 69 negative estimates represents just 64 per cent of the companies that have preannounced.  Ahead of Q4 earnings season, 75 per cent of companies announced EPS estimates shy of analysts’ expectations.

Overall, analysts expect Q1 EPS for the S&P 500 to decline by 0.5 per cent year-over-year.

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