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SOURCE Zacks Investment Research, Inc.
CHICAGO, Oct. 25, 2013 /PRNewswire/ -- Director of Research Sheraz Mian says, "Guidance has been overwhelmingly negative over the last few quarters and is not much different thus far in Q3."
Into the Heart of Earnings Season
Guidance has been overwhelmingly negative over the last few quarters and is not much different thus far in Q3 either, a few notable exceptions aside.
Dow Chemical's (NYSE:DOW-Free Report) comment that "the world continues to show hesitant growth at best, particularly in the near term" spotlights the global growth uncertainties. We saw this theme echoed in the report from Caterpillar (NYSE:CAT-Free Report) as well, as it guided lower. The mining and construction giant noted that "there are encouraging signs, but there is also a great deal of uncertainty worldwide as we look ahead to 2014". Comments from IBM (NYSE:IBM-Free Report), Intel (Nasdaq:INTC-Free Report), and Yum Brands (NYSE:YUM-Free Report) earlier in the reporting cycle were to the same effect.
Not all management commentary is negative, with a handful of companies standing out for positive guidance. Ford appeared particularly positive and confident in its outlook, particularly in its ability to turnaround its still-in-loss European operations. But these positive and upbeat comments are drowned out by the broadly negative or tentative guidance from a majority of the companies.
Given this backdrop, estimates for Q4 will most likely come down quite a bit in the coming weeks. And with the market expecting the Fed to wait till early next year to start Tapering its QE program, investors may shrug this coming period of negative estimate revisions, just like they have been doing for more than a year now.
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