Outlook for corporate earnings.

This week we are heading to the biggest number of companies releasing their earnings results. Up to now for Q3 82 companies of S&P 500 reported their results. 59% beaten estimates vs. 27% missed estimates and 14% were in line with expectations. Especially reports coming from technology sector were surprisingly good, Google (GOOG) or IBM (IBM).

As you can see earnings forecast for Q2 were significantly overestimated. Expected changed was -9.9% vs actual change -29%. For the Q3 earnings estimates remain very high and definitely will be adjusted in coming days. Last quarter only Technology, Industrials and Materials had beaten slightly estimates. Q3 earnings outlook for Energy, Financials or Consumer Discretionary are unrealistic. Let's have a look to expected earnings growth (based on S&P for Q3) for sectors Y-O-Y.

Quarterly Breakdown	2007	2008	% EPS
	Q3A	Q3E	growth
S&P 500	20.9	20.1	-3.8
S&P 500 Consumer Discretion.	2.6	2.2	-15.4
S&P 500 Consumer Staples	4.1	4.3	4.9
S&P 500 Energy	11.0	15.5	40.9
S&P 500 Financials	5.9	1.9	-67.8
S&P 500 Health Care	6.0	6.5	8.3
S&P 500 Industrials	5.4	5.4	0
S&P 500 Information Tech.	4.3	4.6	7
S&P 500 Materials	3.9	3.9	0
S&P 500 Telecommun.	2.2	2.6	18.2
S&P 500 Utilities	4.2	4.2	0

Related tickers: (FXG), (KXI), (RXI), (IYC), (XLE), (IYE), (IXG), (XLF), (IXJ), (XLV), (XLI), (IYJ), (IYW), (IXN), (GSP), (XME), (JXI), (XLU).

Data are based on Standard and Poor's report.