Markets Stay Closed, Some Earnings Delays - Analyst Blog
30 Outubro 2012 - 7:16AM
Zacks
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, 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
a wash, with heavy sales ahead of the storm offsetting the impact
of the shutdowns.
In the 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 almost 8% before the third quarter
reporting season got underway.
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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