Reported earnings still forecast slow recovery

S&P Nov09.jpgThe Q3 company results season is now almost complete. It suggests that:

• Companies still find it difficult to forecast revenue increases
• Earnings are instead being boosted by cost cutting eg jobs

In the US, the average workweek is now at a record low of 33 hours. Whilst EU companies are worrying whether today’s short-time working arrangements can continue into 2010 if demand does not start to recover.

The above chart, from S&P, shows that analysts’ expectations still diverge for reported and operating earnings. Forecasts for operating earnings remain very bullish (blue line), but reported earnings (which meet accounting standards) are still showing a flat outcome, once last year’s destocking falls out of the picture.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.

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