Ahead of Wall Street - October 30, 2012 - Ahead of Wall Street
30 Outubro 2012 - 6:57AM
Zacks
Tuesday, October 30, 2012
Markets remain closed for a second day on Tuesday due to Hurricane
Sandy, with published accounts putting the preliminary estimates of
the storm’s total cost at close to $20 billion. In addition to
insured losses, this cost estimate would include damage to power
lines and other infrastructure.
The estimated insured losses of $5 billion to $10 billion will put
Sandy in the Top 10 category of most expensive hurricanes in the
country’s history. Last year’s Hurricane Irene cost the insurance
industry in excess of 4 billion. Given the relatively uneventful
hurricane season this year before this storm, the insurance
industry is in fairly good shape to absorb Sandy-related losses.
While it’s quite early at this stage, but the storm will likely
have some stimulative economic effects for the region as well, as
homeowners, businesses, and local governments repair storm damage
in the coming days. The net effect on the retail sector may have
been wash, with heavy sales ahead of the storm offsetting the
impact of the shutdowns.
In ongoing third quarter earnings season, a number of companies
scheduled to report results today had to delay the announcements.
Major companies in this category include Automatic Data
Processing (ADP), Avon Products (AVP),
Cummins (CMI), Pfizer (PFE). But
many others are sticking to their published schedules and coming
out with third quarter results. The better than expected results
from Ford (F) and Archer Daniels
Midland (ADM) this morning would fall in that category.
Ford’s results are particularly impressive, with North American
strength offsetting European weakness, resulting in a top- and
bottom-line beat.
As of this morning, we have third quarter results from 285
companies in the S&P 500 or 57% of the index’s total
membership. Total earnings for these 285 companies are down 2.4%
from the same period last year, with 62.8% of the companies beating
earnings expectations. Total revenues are down 2.1% from the same
period last year, with only 37.2% of the companies coming out with
positive revenue surprises. Excluding Finance, total earnings and
revenues are down 4.3% and 2.7%, respectively. The composite growth
rate for the third quarter, where we combine the reported results
with those still to come out, is for a decline of 0.7% (down 4.6%
excluding Finance).
Estimates for the fourth quarter and beyond have started to come
down as companies have guided lower, but they still remain
elevated. Total earnings in the fourth quarter are expected to be
up 4.9%, which is down from close to 8% before the third quarter
reporting season got underway.
Sheraz Mian
Director of Research
ARCHER DANIELS (ADM): Free Stock Analysis Report
AUTOMATIC DATA (ADP): Free Stock Analysis Report
AVON PRODS INC (AVP): Free Stock Analysis Report
CUMMINS INC (CMI): Free Stock Analysis Report
FORD MOTOR CO (F): Free Stock Analysis Report
PFIZER INC (PFE): Free Stock Analysis Report
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