03 October 2014

Poll: What Are the Expectations for Third-Quarter Earnings?

Posted In: Economics

Entering the third-quarter earnings season, the world finds itself suffering high levels of uncertainty amid simmering geopolitical crises in Ukraine, the Middle East, and Hong Kong. Further, many major economies, such as the EU, the United States, and Japan, are seeing declining business and consumer confidence as well as increasing income inequality. China too is seeing a slowdown in its residential housing.

In other words, global corporate earnings have a backdrop of worry. Yet when we asked CFA Institute Financial NewsBrief readers, 43% of respondents indicated they believe businesses will meet earnings expectations. For those thinking that profits will deviate from expectations, respondents believe corporations are likely to outperform those that underperform by 2.35 to 1 (40%: 17%).

Earnings for the quarter that ended Sept. 30 will:

Investors are confident of a good earnings season, and perhaps the profit picture of global business will ameliorate some of the economic doubts. Yet even if businesses deliver, it seems that the corporate earnings season and its gyrations have diminished in importance since 2008–2009. Instead, the market drivers will most likely be interest rates and geopolitical predictions.

If you liked this post, consider subscribing to the Enterprising Investor.

Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Tags: Polls

Share On

About the Author(s)

Jason Voss, CFA

Jason Voss, CFA, tirelessly focuses on improving the ability of investors to better serve end clients. He is the author of the Foreword Reviews Business Book of the Year Finalist, The Intuitive Investor and the CEO of Active Investment Management (AIM) Consulting. Voss also sub-contracts for the well known firm, Focus Consulting Group. Previously, he was a portfolio manager at Davis Selected Advisers, L.P., where he co-managed the Davis Appreciation and Income Fund to noteworthy returns. Voss holds a BA in economics and an MBA in finance and accounting from the University of Colorado.

Ethics Statement

My statement of ethics is very simple, really: I treat others as I would like to be treated. In my opinion, all systems of ethics distill to this simple statement. If you believe I have deviated from this standard, I would love to hear from you: [email protected]