Ghost of Igloi wrote:
FROM S&P: Takeaway stat: With almost three-quarters of the Q4 2015 earnings reported, 69.2% of the issues are beating estimates (slightly higher than the historical rate), as only 40.6% beat As Reported (GAAP) earnings estimates, and 48.2% beat sales estimates -> the current trend is that more companies are citing cost-cuttings, as special items increase (but nowhere near the EBBS, everything but the bad stuff, days of 2000-2), with the continuing story of sales not making their mark. Shocker - the hoped for positive Q4 2015 energy operating earnings have turned negative, which could make the sector negative 4 for 4 in 2015 (at least according to our methodology earnings approach).
there is a positive spin to the adjusted earnings vs. GAAP earnings issue. That spin would be that companies - mostly energy companies - are taking the opportunity to write off everything they can now.
Because everyone knows energy earnings will be terrible, so there is little price to pay for slightly worse earnings. If this spin is correct, the bounceback will be sharp, because writeoffs are one-time issues and not ongoing problems.
I am not agreeing or disagreeing here - just repeating an argument.