Q4 Will Be The Worst U.S. Earnings Season Since The Third Quarter Of 2009
Couple of things: first of all, any discussion whether the US market is in a profit (or revenue) recession must stop: the US entered a profit recession in Q3 when it posted two consecutive quarters of earnings declines. This was one quarter after the top-line of the S&P dropped for two consecutive quarters, and as of this moment the US is poised to have 4 consecutive quarters with declining revenues as of the end of 2015.
Furthermore, as we showed on September 21, when Q4 was still expected to be a far stronger quarter than it ended up being, in the very best case, the US would go for 7 whole quarters without absolute earnings growth (and even longer without top-line growth).
Then, as always happens, optimism about the current quarter was crushed as we entered the current quarter, and whereas on September 30, 2015, Q4 earnings growth was supposed to be just a fraction negative, or -0.6%, as we have crossed the quarter, the full abyss has revealed itself and according to the latest Factset consensus data as of January 8, the current Q4 EPS drop is now expected to be a whopping -5%. And just to shut up the "it's all energy" crowd, of the 10 industries in the S&P, only 4 are now expected to post earnings growth and even their growth is rapidly sliding and could well go negative over the next few weeks.
It gets even worse. According to Bloomberg, on a share-weighted basis, S&P 500 profits are expected to have dropped by 7.2% in 4Q, while revenues are expected to fall by 3.1% This would represent the worst U.S. earnings season since 3Q 2009, and a third straight quarter of negative profit growth. It's no longer simply a recession: as noted above, the Q4 EPS drop follows declines of 3.1% in Q3 and 1.7% in Q2. it is... whatever comes next.
As Bloomberg adds, the main driving forces behind drop in U.S. earnings are the rise in the dollar index (thanks Fed) and the drop in average WTI oil prices. However, since more than half of all industries are about to see an EPS decline, one can't blame either one or the other.
So while we know what to expect from Q4, a better question may be what is coming next, and according to the penguin brigade, this time will be different, and the hockey stick which was expected originally to take place in Q4 2015 and then Q1 2016 has been pushed back to Q4 2016, when by some miracle, EPS is now expected to grow by just about 15%.
Good luck.
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People have finally figured out they have enough shit from China
The coming Financial CATACLYSM. It'll be Ugly, Bloody, and Messy >> http://bit.ly/1KogtGi
Death by a thousand paper fiat cuts.
“You didn't earn that”
elitists want the folks to believe day is night and night is day. who believes that is gonna happen?
Right away - the Sheeple already believe Waar is Peace and Repression is Safety, and the death of Free speech is Good For You.
1. lower oil prices were supposed to be good for the economy.
2. the reason the dollar is so high is because the economy sucks so it is the chicken - egg thing.
3. earnings suck because the economy sucks because bernanke.
I wonder if Hugh Hendrey is still managing money. I sold everything when he announced he'd drank the Koolaid.
And where is Fleckenstein? He's missing all the fun.
I think he is still around. I am going to wager he is too busy to interview right now with his selling.
more printing and more war until one leads to a collapse in the capability to do the other.
What I find strange is that every time the market slipped over the last 6 years, they would trot some F-Stick from the FED out to say all is well. Why are they not saying anything now? Are they supposed to sit back and watch it crash now?
I am just waiting for it to fall apart so we can start over. And I want to see bankers jump.
I am just waiting for it to fall apart so we can start over. And I want to see bankers jump.
That's aspicy meatball!
Qe4 will be the worst response to it Eva . But the fucktards will do it anyway or war . Hell.maybe both
“From now on, depressions will be scientifically created.” — Congressman Charles A. Lindbergh Sr. , 1913
Buybacks -R-Us ?
This is beyond ridiculous.
Tell me how consumer staples are forecasted to decline but consumer discretionary is forecasted to grow at 5%
Feel the Bern will take care of the staples... EBT will cover the rest.
stop it with the noticing, you'll break the spell!
When is QE4 to INFINITY starting Mr. Yellen?
When is QE4 to INFINITY starting Mr. Yellen?
The reason that the dollar continues to be strong when measured against other currencies is easy, when you understand that the American dollar remains the best place to park your money in a world completely full of debt and chaos. cheers
And that is by design, like a spider spinning a web.
Obama says Bloomberg is peddling fiction. Who you going to believe?