LONDON The outlook for Wall Street earnings has deteriorated significantly in recent months, data shows, raising the risk that companies in the United States may slip into recession before its economy does - with Europe close behind.
By Josephine Mason and Helen Reid
LONDON, Feb 15 The outlook for Wall Street
earnings has deteriorated significantly in recent months, data
shows, raising the risk that companies in the United States may
slip into recession before its economy does - with Europe close
Analysts on average expect the S&P 500's first-quarter
earnings per share to drop 0.3 percent year-on-year, according
to I/B/E/S Refinitiv data.
That's a big drop from the 8.2 percent rise expected as
recently as October and would mark the first contraction in U.S.
company earnings in three years.
Analysts have also made deep cuts to forecasts for the rest
of the year.
They still expect growth in the remaining three quarters,
meaning Wall Street would avoid a technical recession typically
defined as a fall in two consecutive quarters. But only just, as
the lowered growth forecasts are meagre.
For a graphic on U.S. earnings estimates over time: https://tmsnrt.rs/2TRqqof
The swift pace and size of the cuts have kindled concerns
that the downward trend will continue, particularly as companies
struggle with squeezed margins and large amounts of debt.
The full-year estimate stands at just 4.2 percent now, down
more than half from 10.2 percent in October.
It's pretty gloomy on the other side of the Atlantic too.
Analysts anticipate barely any growth among European companies
listed on the STOXX 600 at the slowest in 18 months,
For a graphic on European earnings estimates over time: https://tmsnrt.rs/2EaTT7f
(Reporting by Josephine Mason and Helen Reid; editing by John
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