S&P 500 earnings update

Standard and Poors finally released an update for the 4th quarter earnings today, and the news is even worse than the last update on February 15th – and keep in mind that this does NOT include the nuclear loss that AIG dropped on the market this morning.  AIG announced the largest loss by any company in history – $61.7 billion.

That’s for  just the 4th quarter.  And we (the US taxpayer) have already spent $163 billion trying to bail them out.  (Hey Geithner, it ain’t working.  Cut your(our) losses and fold.)

Back to the S&P 500.  The latest update (link will open an Excel spreadsheet from S&P’s site) by Howard Silverblatt, S&P’s Senior Index Analyst was released today, with data updated through the close on Friday, Feb 27th.  In it, he says With 96.38% of the market value and 457 issues reported, operating earnings are -70% below Q4,’07.

Earnings per share for the S&P 500 are – well, there ain’t none.  Just losses.  Aggregate “As Reported” losses now total -$12.69/share.  To put that into perspective, there’s never been a cumulative quarterly loss for the S&P 500 until now.  And that’s before the numbers from AIG are added in.  And that’s -$22.95/share.

Operating earnings per share (preferred by some because they leave out “one” time charges) are also down 70% from a year ago.  In Q4 of 2007, they were $15.22 and in Q4 of 08, that number has dropped to $4.59.

If you want to see the numbers behind the headline numbers, click on the tab (in the S&P 500 spreadsheet linked above) labeled “Issue Level Data”.  That’s where you can see all the stocks which make up the S&P 500 (at least those who have reported earnings so far this quarter) and check out their actual numbers.  The “As Reported” column gives the earnings/share for the current quarter (Q4, 2008) and the “Prior Year” column gives the earnings for Q4 of 2007.

S&P doesn’t add them up on this page, but I did.  Here are the results.

Total Q4, 2007 As Reported Earnings/Share = $232.02   and the Total Q4, 2008 As Reported Earnings/Share comes to -$162.71.  Yes, that’s a minus sign in front of Q4, 2008.  get used to it.  I think you’ll be seeing it again in 2009.

Do the same for the Operating Earnings columns.  Q4, 2007 was $304.58 and Q4, 2008 has dropped to $134.06.  About a 56% decrease year over year.

Howard Silverblatt also says Reported quarterly sales are down -9.16%.  And if anyone thinks the 1st quarter of 2009 will be an improvement, I invite you to go into your nearest mall, shopping center, restaurant, or auto dealership.  Check out for yourself if they’re busy.  Do a mental comparison with what you saw at those businesses last year.  Then shut up.

With that in mind, The strangest part to me is that S&P is estimating Q1 2009 operating earnings to be $13.74, just 17% below last year, and a whopping 300% INCREASE from last quarter.  And they’re still forecasting 2009 full year earnings to be $65.56 – $15 HIGHER than the $54.19 2008 is estimated to finish at.  If you believe that number, I’ve got a bridge for you – and some beach front property too.  Cheap.  Trust me.

Whatever they’re smoking at Standard and Poors, I gotta get me some!  If it will allow me to ignore reality that much, that’s some good shit!

gk

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  2. […] example as I detailed a few days ago, Standard and Poors is still estimating 2009 earnings for the S&P 500 to come in at $64.37 – a […]

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