Earnings, and profit warnings

Alcoa Inc. (AA) kicked off earnings season with a 4% fall in profit compared to a year earlier. Analysts had been expecting slightly worse. Companies often like to lower the bar of expectations so they can surprise to the upside. Look for more positive surprises than negative ones again this season.

Profit warnings:

Regional Bank Huntington Bancshares Inc. (HBAN) warned that second-quarter profit were hit by "difficult and deteriorating residential real-estate markets." They gave no guidance as to the full effect on 2Q07 earnings.


Lexmark International Group, Inc (LXK) gave a little more detail on their profit warning saying 2Q07 earnings would now be in the range of 64 cents and 69 cents a share, analysts had been expecting between 82 - 92 cents a share.

Things are expected to get a lot worse before they get better for Lexmark forecasting 3Q07 profit to dip to between break-even and 10 cents a share.