dimanche 5 avril 2015
Analysts warn of 2015 ‘profit recession’ ahead of U.S. first quarter reports
Posted on 15:21 by nice news
America’s largest corporations will begin reporting earnings this week, marking the first quarter in a year in which profit growth is expected to be difficult to come by.
S&P Capital IQ is warning of a possible “profit recession” in 2015, as earnings growth is estimated to rise just 0.3 per cent this year. Senior analyst Lindsey Bell says first-quarter earnings per share for S&P 500 companies are expected to decline by 3 per cent compared with the same period in 2014, which, if realized, would be the first annual decline in quarterly earnings since the third quarter of 2009.
Energy is the prime culprit for the benchmark index’s profit woes; earnings in this sector are forecast to fall by 63 per cent. Financials, health care and consumer discretionary are projected to post the most robust earnings growth, but not enough to offset the weakness in energy, materials, utilities, telecom services and consumer staples.
In many respects, though the calendar has changed, the big themes remain the same.
Global growth remains sluggish, with encouraging signs in Europe overshadowed by a moderation in Chinese growth and a poor start to the year in the United States.
The strength of the U.S. dollar and its deleterious effect on companies that earn a substantial portion of their revenues from overseas will be front and centre in quarterly reports and conference calls with management. The U.S. dollar index, a measure of the value of the greenback relative to the currency of its largest trading partners, rose 9 per cent in the first three months of the year and briefly eclipsed 100 for the first time since April, 2003.
According to some strategists, however, the lofty greenback can be a positive for equities, if not for earnings. The U.S. dollar’s strength reflects a preference for U.S. assets, and valuations tend to increase as
S&P Capital IQ is warning of a possible “profit recession” in 2015, as earnings growth is estimated to rise just 0.3 per cent this year. Senior analyst Lindsey Bell says first-quarter earnings per share for S&P 500 companies are expected to decline by 3 per cent compared with the same period in 2014, which, if realized, would be the first annual decline in quarterly earnings since the third quarter of 2009.
Energy is the prime culprit for the benchmark index’s profit woes; earnings in this sector are forecast to fall by 63 per cent. Financials, health care and consumer discretionary are projected to post the most robust earnings growth, but not enough to offset the weakness in energy, materials, utilities, telecom services and consumer staples.
In many respects, though the calendar has changed, the big themes remain the same.
Global growth remains sluggish, with encouraging signs in Europe overshadowed by a moderation in Chinese growth and a poor start to the year in the United States.
The strength of the U.S. dollar and its deleterious effect on companies that earn a substantial portion of their revenues from overseas will be front and centre in quarterly reports and conference calls with management. The U.S. dollar index, a measure of the value of the greenback relative to the currency of its largest trading partners, rose 9 per cent in the first three months of the year and briefly eclipsed 100 for the first time since April, 2003.
According to some strategists, however, the lofty greenback can be a positive for equities, if not for earnings. The U.S. dollar’s strength reflects a preference for U.S. assets, and valuations tend to increase as
Analysts warn of 2015 ‘profit recession’ ahead of U.S. first quarter reports
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