SOURCE: Five Star Equities
NEW YORK, NY--(Marketwire - Oct 24, 2012) - The S&P 500 Index has performed admirably so far in 2012, gaining roughly 15 percent year-to-date, but is expected to experience a bit of a slowdown as we head into third quarter earnings season. Approximately 69 percent of S&P companies who have reported third quarter results so far have beat analysts' estimates on earnings, while 59 percent of companies have missed sales forecasts according to data from Bloomberg. Five Star Equities examines the outlook for companies in the S&P 500 Index and provides equity research on Baker Hughes Inc. (NYSE: BHI) and Caterpillar Inc. (NYSE: CAT).
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Collective third quarter profits for companies in the S&P 500 are expected to decline in the third quarter for the first time in three years according to analysts' estimates collected by Bloomberg. Analysts have now lowered their projection to a 0.3 percent drop in S&P 500 earnings for the third quarter, compared with an estimate of a 2 percent decline in late September.
"The market has been decently resilient," Tim Hoyle, director of research at Haverford Trust Co., said in a recent phone interview. "We went into the earnings season with very dire expectations. So far they haven't been specifically horrible, but there are definitely specific cases where we do see earnings came in weaker than expected."
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Baker Hughes is a leading supplier of oilfield services, products, technology and systems to the worldwide oil and natural gas industry. For the third quarter of 2012 the company reported adjusted net income of $3.22 million, or $0.73 per share. Average analysts' estimates were expecting net income of 89 cents per share. "Internationally, the collective rig count in Brazil, Colombia, and Norway was down 17 percent compared to the last quarter, and these are all meaningful markets for Baker Hughes," said Martin Craighead, Baker Hughes' President and CEO.
Caterpillar has reported earnings that topped estimates, but fell short on estimated revenues. The company has lowered its full-year guidance from $9.40 to $9 to $9.25 a share. "We are taking a pragmatic view of 2013 -- we're not expecting rapid growth, and we're not predicting a global recession. At this point, we expect 2013 sales will be similar overall to 2012, but with a slightly weaker first half and a slightly better second half," Caterpillar Chairman and CEO Doug Oberhelman said in a statement.
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