By JACK HOUGH
Earnings season kicks off next week amid high uncertainty on Wall Street--especially concerning the companies below.
Analysts have spent more than seven months steadily lowering their first-quarter earnings forecasts for the broad market. Earnings for the S&P 500 index are now expected to rise 5% from the first quarter of last year, according to S&P. A year ago, the growth rate was 16%.
What remains to be seen is whether estimates have come down far enough for companies to beat them, and how stocks will respond.
The companies below present a different dilemma for investors. The analysts who forecast their earnings show unusually wide disagreement in their numbers. Estimates, in other words, are all over the place.
High levels of "estimate dispersion", as it's called, are generally a negative sign for investors, but not always. Research by Anna Scherbina at the University of California at Davis and others has shown a link between widely scattered estimates and sub-par future stock returns and earnings growth. Companies that have little good news to share tend to give little guidance, the thinking goes, leaving analysts to guess.
Of course, there are other reasons analysts might disagree on their forecasts. Companies that are in a state of rapid change, or whose profits are affected by volatile commodity prices, can produce wide earnings swings that are difficult to predict.
- Earnings date: April 19
- Consensus estimate: 71 cents
- High estimate: $1.00
- Low estimate: 57 cents
- Earnings date: April 17
- Consensus estimate: $3.38
- High estimate: $4.00
- Low estimate: $2.03
First-quarter profits for Goldman Sachs (GS)
- Earnings date: April 25
- Consensus estimate: 77 cents
- High estimate: $1.10
- Low estimate: 47 cents
Newfield Exploration (NFX)