Canadian Money Forum banner
1 - 2 of 2 Posts

·
Registered
Joined
·
546 Posts
Discussion Starter · #1 · (Edited)
I get sooo pissed by the media coverage of earnings and EPS. They have ALL stopped using the reported accounting EPS and moved to the 'earnings before the bad stuff' that was prevalent in the tech bubble.

The line being repeated right now is "the earnings are good, but of poor quality because there is no revenue growth, just cost cutting". Please look for yourself at the numbers S&P publishes on this spreadsheet (Sheet1). You will see something quite different.
http://www2.standardandpoors.com/spf/xls/index/SP500EPSEST.XLS

When I looked 197 companies had reported. By totaling the columns and finding the percent difference from last year you get (not value weighted):

Percent change in revenues.........................10 % down
Percent change in reported earnings .............30 % down
Percent change in earnings before bad stuff ...18 % down

Earnings before the bad stuff is still 96 % higher than reported earnings. Historical average is 16 % higher.

From Sheet2 you can annualize the quarterly reported earnings ($7.27*4quarters=$29.08)
and compare to the index value at quarter end ($919.32) to get a rough
P/E = 29
 
1 - 2 of 2 Posts
This is an older thread, you may not receive a response, and could be reviving an old thread. Please consider creating a new thread.
Top