Charting The Worst Earnings Guidance In Over Five Years

Tyler Durden's picture


With over a third of the S&P 500's market cap having reported, results have been mixed. Aggregate earnings are tracking ahead of expectations but this miracle is driven almost entirely by financials (which account for 85% of the beat) as lower expenses and higher reserve bleeds offset contracting NIMs (combined with a lack of MtM) to enable a total manufacturing of what S&P 500 EPS is. As Morgan Stanley's Adam Parker notes, the quality of the beats has been low, with companies benefiting from a mix of lower operating costs and lower taxes. Revenues are missing estimates (hurt by a stronger USD and macro weakness) and Tech has been particularly weak. More importantly, for all the hope-driven, recovery-is-around-the-corner, 'fiscal-cliff'-won't-happen believers, the majority of forward guidance has been negative resulting in the highest negative-to-positive ratio since 1Q07 but this is not priced in as top-down 4Q12 estimates have hardly budged.


Earnings are slightly ahead of expectations - thanks almost entirely to financials! Do you tust that data?



Negative guidance is dominating positive outlook changes...


yet top-down EPS estimates remain unchanged (to slightly higher - again thanks to financials)


as for the 24th week in a row, net earnings revisions are negative...


and where are the world's EPS estimates being cut the most? (i.e. where was hope highest?)...


So you still believe in miracles?


Charts: Morgan Stanley and @Not_Jim_Cramer

Your rating: None

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Mon, 10/22/2012 - 10:04 | 2909321 rajc
rajc's picture

we belive in QEnfinitum.

Mon, 10/22/2012 - 10:08 | 2909334 Big Slick
Big Slick's picture

Microsoft pop-ups??!!!  Have the Tylers jumped the shark?

Mon, 10/22/2012 - 10:09 | 2909346 Buckaroo Banzai
Buckaroo Banzai's picture

Tyler, these bottom-of-the-screen ad pop ups are killing me. I know you deserve to get paid for what you do, but there's got to be a less obnoxious way to do it.

Mon, 10/22/2012 - 10:32 | 2909352 TruthInSunshine
TruthInSunshine's picture

Adblock plus ftw.


+  Bernank's endless salad, soup, pasta bowl & bonus menu for the banking/financial wards of the state is now beginning to cannibalize the non-banking/financial corporations.

It's going to be epic to watch this continue.

Non-financials are starting to be absolutely eaten alive by soaring input costs, this is only going to accelerate at a brisk clip with the now global chorus of fractional reserve fiat flowing, and whomever thinks they'll be able to transfer/pass on these costs in even significantly large measure to end customers in the current "what I need, not want" deleveraging cycle is naive as can be.

OT: Microsoft is about to commit complete seppuku with Windows 8 release, btw. If there was a single leader with an ounce of intelligence @ Microsoft, they'd delay the release and completely revise it in order to avoid Vista 2.0 (the even more frightening sequel).

Mon, 10/22/2012 - 10:37 | 2909401 adr
adr's picture

I agree completely. For the first time in 25 years I sat down at a computer and didn't know what to do.

When you use a computer for work, turning the OS into a smartphone interface doesn't work at all.

If all you do is e-mail and check Facebook, then Win8 might work. I got to play with a computer that had Adobe CS running and it was the biggest pain in the ass to use. The idea is that you swipe the screen to switch between the apps, WHAT IF YOU DON'T HAVE A TOUCH SCREEN?

I also don't care about seeing 100 useless squares when I am looking for the application I need. After the Vista start menu change, I though Microsoft couldn't make a worse decision. Don't even get me started on the god awful color scheme and complete destruction of the desktop environment.

Mon, 10/22/2012 - 14:43 | 2910274 emersonreturn
emersonreturn's picture

adr and End The Fed...short on Microsoft...the next implosion after Rim

Mon, 10/22/2012 - 15:57 | 2910502 StychoKiller
StychoKiller's picture

Get thee to Linux (and never look back!)

Mon, 10/22/2012 - 10:42 | 2909412 Water Is Wet
Water Is Wet's picture

Re: Windows 8... I believe it is pronounced W8.  As in, hurry up and W8!

Mon, 10/22/2012 - 10:15 | 2909358 Big Slick
Big Slick's picture

Just got one for Yoyodyne Propulsion Systems 'The future begins tomorrow!"

Mon, 10/22/2012 - 11:14 | 2909524 Buckaroo Banzai
Buckaroo Banzai's picture

It's pronounced Big-boo-TAY!

Mon, 10/22/2012 - 10:15 | 2909363 unrulian
unrulian's picture

mmmmm....turn off pop-ups perhaps

Mon, 10/22/2012 - 10:44 | 2909411 dtwn
dtwn's picture

Using chrome, I'm not getting these pop ups that everyone's complaining about. . . . . . 

Also, unless you've donated (top right on the menu bar) as I have, there isn't much room to complain about ads. . . . . .

Mon, 10/22/2012 - 11:15 | 2909528 Buckaroo Banzai
Buckaroo Banzai's picture

If you're on an iPad, these pop ups are a real bone.

Mon, 10/22/2012 - 13:11 | 2909931 Mr_Wonderful
Mr_Wonderful's picture

I have adblock and noscript and never see this stuff.

Mon, 10/22/2012 - 10:07 | 2909328 Cognitive Dissonance
Cognitive Dissonance's picture

It's all good bro. Ben's got our backs.

<Portfolio insurance redux.>

Mon, 10/22/2012 - 10:14 | 2909360 HelluvaEngineer
HelluvaEngineer's picture

The "white shoe boys" are doing a great job of painting the tape today.

Mon, 10/22/2012 - 10:20 | 2909371 Lewshine
Lewshine's picture

Yeah, but not before triggering my stops with a nice healthy dip at the open - PRICKS!

Mon, 10/22/2012 - 10:51 | 2909433 RSBriggs
RSBriggs's picture

You place hard stops?  The HFT algos send their thanks and regards.  Fool.

Mon, 10/22/2012 - 11:24 | 2909557 NotApplicable
NotApplicable's picture

Squid bait.

Mon, 10/22/2012 - 10:28 | 2909387 bdc63
bdc63's picture

just like deficits, earnings don't matter


Mon, 10/22/2012 - 10:49 | 2909423 _ConanTheLibert...
_ConanTheLibertarian_'s picture

so he can ass rape us?

Mon, 10/22/2012 - 10:08 | 2909336 swissaustrian
swissaustrian's picture

No wonder financials can beat expectations given all the money printing.

It was the same during the Weimar period in Germany. The Reichsbank (central bank) gave in to the demands of the private bankers for too long. Finally the currency collapsed.

Constantino Bresciani Turroni's book "the economics of inflation" gives you a detailed account of that period.

Mon, 10/22/2012 - 14:51 | 2910306 marathonman
marathonman's picture

When Money Dies by Adam Fergusson is also a good read about the Weimar hyperinflation.  Playing chicken with hyperinflation is an area where even angels fear to tread.   

Mon, 10/22/2012 - 10:08 | 2909337 awakening
awakening's picture

"Earnings are slightly ahead of expectations - thanks almost entirely to financials! Do you tust that data?"

So little 'trust' that even ZH didn't want to spell it out too clearly (or was that an ironic typo) :P

Mon, 10/22/2012 - 10:08 | 2909339 Everybodys All ...
Everybodys All American's picture

stronger US dollar?

in other news... there is the first Fed kick save of the day. Dow jumps 60 points in seconds.

Mon, 10/22/2012 - 10:16 | 2909364 Bay of Pigs
Bay of Pigs's picture

Rah Rah! King Doelarr!

Mon, 10/22/2012 - 10:10 | 2909343 I Am Not a Copp...
I Am Not a Copper Top's picture

And now they will miraculously beat these lowered expectations, which of course will be bullish

Mon, 10/22/2012 - 10:10 | 2909349 LawsofPhysics
LawsofPhysics's picture

So, the majority of our GDP is nothing but pushing fucking paper?  - FAIL.

Mon, 10/22/2012 - 10:15 | 2909353 turbosuperman
turbosuperman's picture

Bernie Madoff should be Secretary of the Treasury and Chairman of the Federal Reserve.

Desperate times call for desperate measures.

"F*ck my victims..."

Too bad Bernie didn't have a printing press and nuclear arsenal.  He could have kept it going a little while longer and then taken everyone else down with him.

Mon, 10/22/2012 - 10:37 | 2909402 Big Slick
Big Slick's picture

I thought he already was

Mon, 10/22/2012 - 10:13 | 2909356 rubearish10
rubearish10's picture

How quickly, Friday's sentiment is behind us, hey?

Mon, 10/22/2012 - 10:14 | 2909361 jjsilver
jjsilver's picture

That should be good for another dow 200 points to the upside, just to let everyone know who is the boss

Mon, 10/22/2012 - 10:17 | 2909366 Quinvarius
Quinvarius's picture

You can't kill this bull with trivia.  It is all about the free money.  The boogey man 1987 anniversary MSM attack was laughable.  Good luck causing a banking crisis when banks don't even have to report honest quarterlies and can get 0% money all day and all night.

Mon, 10/22/2012 - 10:37 | 2909398 Lewshine
Lewshine's picture

Zactly Q,

ZH and every other right minded opinion blogs base their theories on a set of rules that add up to "collapse". Problem is, none of these banks are playing by any of the rules that are applicable to the historical behavior and theories used to evaluate a collapse.

Therefore, as things get progressively worse get out of the way, or stay long and watch the keepers of the gate continue to move the goal post in order to keep this shit can of a market paying the pigs that rule over it.

Mon, 10/22/2012 - 10:20 | 2909370 lolmao500
lolmao500's picture

The world’s biggest bond traders say the Federal Reserve will decide before year-end to buy Treasuries in addition to purchasing $40 billion of mortgage bonds a month as gains in U.S. employment and consumer confidence prove unsustainable.

Mon, 10/22/2012 - 10:33 | 2909394 Quinvarius
Quinvarius's picture

At some point the Fed is just going to have mainline free cash into the system with no pretense of loaning or QE to buy a few years of status quo all at once.  It cannot work permanently as children like Jamie Dimon will never go along with any sort of banking reform.

Mon, 10/22/2012 - 17:42 | 2910899 TruthInSunshine
TruthInSunshine's picture

Bernanke will soon announce fractional reserve alchemists have failed to turn lead into gold, and are abandoning those efforts, choosing to focus on a new project of printing oil.

Mon, 10/22/2012 - 10:34 | 2909392 XtraBullish
XtraBullish's picture

They haven't gotten short enough to allow it to soon as the white shoes are glistening from shorty shoe polish, this market will tank - JUST LIKE 1980 after Ronnie got elected...

Mon, 10/22/2012 - 10:40 | 2909405 Vince Clortho
Vince Clortho's picture

Who needs earnings when you have cash?

Print up some more $$$$$$ and put this earnings nonsense to bed.

Mon, 10/22/2012 - 10:41 | 2909408 SheepDog-One
SheepDog-One's picture

2 more weeks then the 'all important elections' are over, well I got my seatbelt fastened.

Mon, 10/22/2012 - 12:26 | 2909795 orangegeek
orangegeek's picture

I can't sell my product, so I'll stuff channels for new found revenue and fire employees to keep costs down.


The recession/depression is over and we are well on our way to growth.

Do NOT follow this link or you will be banned from the site!