In this podcast we speak with John Butters, Senior Earnings Analyst for FactSet, for a preview of the Q4 earnings season. John discusses how the quarter has started and what guidance suggests for this season. He also ventures to predict some market trends he expects to see in 2012.
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Highlights from our episode:
We began the fourth quarter after a higher number of companies issued negative guidance; all ten sectors have, as a result, seen reductions in estimates
The Materials sector saw aggregate earnings drop 27% since the start of the quarter, the worst among the sectors
This quarter, of the companies who issued guidance, 75% lowered expectations; over the past few quarters 65% of companies issued negative guidance so this quarter represents lower expectations over all
The Telecomm sector is expected to see the weakest growth in the fourth quarter
An interesting trend has occurred in terms of valuation for the S&P 500; valuations have actually increased over the past three months
Looking ahead to 2012 as a whole, one guess for what's ahead may be that declining economic growth in the emerging markets will hurt companies who rely on export to these markets to boost sales
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