Good piece here from Friday at Reuters on the profit picture. This is a big concern heading into the current earnings season. As the global economy slows companies are really setting expectations lower. Via Reuters:
Third-quarter U.S. earnings have just begun, but already U.S. companies are sounding alarm bells about the fourth quarter.
Outlooks for the fourth quarter – just two weeks old – are so far decidedly more negative than positive. Thomson Reuters data shows 11 negative outlooks so far from Standard & Poor’s 500 companies and no positive outlooks.
Third-quarter guidance, meanwhile, at the comparable period showed 6 negative outlooks and no positive.
However, U.S. companies so far are having a tougher time beating analyst expectations in the third quarter, with 59 percent of companies exceeding forecasts, below the 62 percent long-term average, based on Thomson Reuters data. And year-over-year growth is expected to be negative for the first time in three years.
Revenue trends have also been weak: Just 50 percent of companies that have reported have beaten estimates on revenue, compared with the 62 percent average, he said.