Earnings Estimates Continue To Decline

Another report out today shows that earnings estimates for the first quarter continue to be revised sharply lower which from a contrarian point of view is encouraging at a minimum. Analysts have been far too optimistic for earnings ahead of and during the downturn and by the time earnings bottom out they will likely be way too pessimistic.

Year over year, earnings for the first quarter of 2009 are expected to fall almost 38% overall versus the results reported in the first quarter of 2008. When 2009 began, analysts were only expecting the decline to be around 12.5%, so it will be interesting to see whether analysts overshot to the downside or are still too rosey.

According to Thomson Reuters, this will be the first time in recorded history (since 1998) that all 10 sectors will report a year over year decline. Consumer discretionary is forecasted to be the worst of the sectors while healthcare is predicted to show the smallest decline.

Johnson & Johnson, Intel and the earnings call for Goldman Sachs (results released today) will kick us off tomorrow as earnings season finally gets into full swing!