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US 1Q11 Reporting Season Wrap –
Recovery still exceeding expectations
Event
We update our outlook for US equity market following the completion of 1Q11
US reporting season and analyse profit results and key trends for the market.
Impact
1Q11 underlying profits were delivered +6.8% ahead of pre reporting
season expectations. This strong earnings performance has driven
CY11 forecast profits 2.3% higher, and as a result, the consensus CY11
EPSg forecast has been upgraded 2.6ppts to now stand at +15.1%. This
stronger earnings momentum is reflected in the CY11 earnings revision
ratio (1.9x) with all major industries seeing net upgrades.
Of the 421 S&P 500 companies to report March quarter results, 201 exceeded
consensus EPS expectations by >+5%, while only 62 disappointed by >-5%.
Outlook
The 1Q11 profit results again exceeded market expectations, suggesting the
US recovery continues to build. Notably, the gap between the earnings
forecast and those delivered widened again in 1Q11 (+6.8%), contrasting the
narrowing over each quarter in CY10 (+14.6% in 1Q10 to +3.4% in 4Q10).
Standout sectors delivering a positive earnings and revenue surprise in 1Q11
include IT, Healthcare, Energy, Auto, Industrials, Materials, REITs and
Mining sectors. Key stocks beating expectations from these sectors include:
Exxon, Apple, Intel, GE, Ford, Caterpillar, Merck, Chevron,
Unitedhealth, Johnson & Johnson, Freeport McMoran.
Most notable for downgrades (although still a net upgrade) was Financials,
with Morgan Stanley, BoA, and Goldman Sachs seeing the most significant
downgrades. Key tech stock Amazon was also a notable downgrade..
Upgrades to CY11 seen throughout 1Q11 reporting season – Earnings
revisions close to 2x – indicate broad upgrade momentum
Visit http://indiaer.blogspot.com/ for complete details �� ��
US 1Q11 Reporting Season Wrap –
Recovery still exceeding expectations
Event
We update our outlook for US equity market following the completion of 1Q11
US reporting season and analyse profit results and key trends for the market.
Impact
1Q11 underlying profits were delivered +6.8% ahead of pre reporting
season expectations. This strong earnings performance has driven
CY11 forecast profits 2.3% higher, and as a result, the consensus CY11
EPSg forecast has been upgraded 2.6ppts to now stand at +15.1%. This
stronger earnings momentum is reflected in the CY11 earnings revision
ratio (1.9x) with all major industries seeing net upgrades.
Of the 421 S&P 500 companies to report March quarter results, 201 exceeded
consensus EPS expectations by >+5%, while only 62 disappointed by >-5%.
Outlook
The 1Q11 profit results again exceeded market expectations, suggesting the
US recovery continues to build. Notably, the gap between the earnings
forecast and those delivered widened again in 1Q11 (+6.8%), contrasting the
narrowing over each quarter in CY10 (+14.6% in 1Q10 to +3.4% in 4Q10).
Standout sectors delivering a positive earnings and revenue surprise in 1Q11
include IT, Healthcare, Energy, Auto, Industrials, Materials, REITs and
Mining sectors. Key stocks beating expectations from these sectors include:
Exxon, Apple, Intel, GE, Ford, Caterpillar, Merck, Chevron,
Unitedhealth, Johnson & Johnson, Freeport McMoran.
Most notable for downgrades (although still a net upgrade) was Financials,
with Morgan Stanley, BoA, and Goldman Sachs seeing the most significant
downgrades. Key tech stock Amazon was also a notable downgrade..
Upgrades to CY11 seen throughout 1Q11 reporting season – Earnings
revisions close to 2x – indicate broad upgrade momentum