Bangkok--27 Sep--Standard & Poor's
Earnings Boosted by Energy and Materials
Standard & Poor's announced today that the S&P 500 is expected to show strong quarterly growth in third-quarter operating earnings, and extend its record number of consecutive quarters of double-digit year-over-year earnings gains to 18. The anticipated third-quarter earnings of $21.53, or $194 billion in aggregate, would represent a 14.3% gain over the $18.84, or $170 billion, reported for the third quarter of 2005.
"During the second quarter, S&P 500 earnings were led in most part by the Energy sector. This current quarter, however, has a broader base contributing to earnings growth, with six of the 10 sectors expected to post double-digit gains," says Howard Silverblatt, Senior Index Analyst at Standard & Poor's Index Services. "Energy is expected to continue strong with a 27% gain for the quarter, and Materials should continue to recover from poor second-half 2005 results."
"We think the effects of a projected weakening rate of GDP growth, relatively high energy prices and 17 consecutive interest rate increases will be more than offset by the benefits accruing from still favorable business conditions and near record corporate profit margins and cash balances," says Sam Stovall, Chief Investment Strategist of S&P's Equity Research Services. "For all of 2006, S&P predicts a healthy 13% rise in operating earnings reflecting broad based sector growth."
For the full year, S&P expects this growth to be led by energy and materials, reflective of high global commodity prices.
Q1 2006 Q2 2006 Q3 2006 Q4 2006 2005 2006
OVER OVER OVER OVER OVER OVER
Q1 2005 Q2 2005 Q3 2005 Q4 2005 2004 2005
(actual) (actual) estimated) (estimated) (actual)(estimated)
Consumer Discretionary 27.4% 7.7% 23.4% -0.5% -3.5% 12.7%
Consumer Staples 6.1% 5.9% 2.9% 4.5% 4.9% 4.8%
Energy 36.3% 44.1% 27.0% 9.4% 44.0% 27.5%
Financials 6.5% 12.9% 17.9% 19.2% 3.6% 13.8%
Health Care 23.5% -1.7% 6.8% 6.4% 8.5% 8.4%
Industrials 20.1% 15.7% 9.7% 12.7% 24.8% 14.3%
Information Technology 9.0% -2.8% -2.3% 0.2% 18.5% 0.8%
Materials 6.5% 19.4% 41.2% 42.2% 18.5% 25.2%
Telecommunication Svc -1.3% 0.0% 14.4% 57.5% 5.6% 15.0%
Utilities 6.2% 29.6% 15.1% 3.3% 12.8% 12.7%
S&P 500 15.3% 13.0% 14.3% 10.7% 13.0% 13.2%
% OF % OF ESTIMATED
YTD MARKET 2006 OPERATING
9/21/2006 VALUE EARNINGS
Consumer Discretionary 5.0% 10.1% 8.4%
Consumer Staples 9.1% 9.8% 8.0%
Energy 6.3% 9.1% 15.6%
Financials 7.9% 22.3% 26.9%
Health Care 4.6% 12.8% 10.3%
Industrials 2.7% 10.8% 10.3%
Information Technology 0.3% 15.3% 10.5%
Materials 3.0% 2.9% 3.4%
Telecommunication Svc 22.0% 3.5% 3.1%
Utilities 6.7% 3.4% 3.4%
S&P 500 5.6% 100.0% 100.0%
Source: Standard & Poor's
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