As you know by now, stock market analysts are a bit on the slow side but they are starting come round to reality, although they still have a long way to go. After months of rosy forecasts for 3Q08 earnings, analysts have finally succumbed to the idea that it they won't be much good now expecting a -0.6% decine in operating earnings.
Remember that the third quarter last year is when the proverbial started hitting the fan making this years comparisons a little easier. That said I expect earnings to eventually show a double digit decline beofore the quarter is out.
Also of note is that FY08 earnings are now anticipated to be down -5.7%, well down from the lofty predictions of more than +19% back in February.
Analysts have also pushed back the timeframe for when they expect earnings will surpass their former peak. Previsouly anaylsts had expected S&P500 operating earnings to surpass the record set in 2Q07 by 4Q08 - just 6 quarters later. Now they have pushed that out until 2Q09 a full 2 years or 8 quarters later.
However, as noted previously, it took 20 quarters after peak earnings in 1989 and 14 quarters after the peak in 2000 for earnings to regain their former highs. Expect those behind the curve analysts to keep pushing their forecasts out as the months progress.