Q1 Operating earnings will end up between $8.00 and $9.50 per share (with 65% of companies reporting they are at $10.79 - THEY ALWAYS drop $1 to $3 in the last 35% reporting).
Thus say $9 per share OPERATING EARNINGS for Q1.
My estimate for the balance of the year:
Q2 $10.00 Q3 $10.00 Q4 $ 4.00
2009 TOTAL OPERATING = $33 per share (worst earnings since 1994/1995 when S&P 500 was at 375 to 450).
2009 "as reported" earnings will be NEGATIVE for full year 2009! FIRST TIME EVER! E-V-E-R!
The good news is that 2009 will be the trough in earnings.
The VERY BAD NEWS is that the market has NOT DISCOUNTED this fact nor the fact that 2010 and 2011 will have operating earnings of LESS THAN $40 in 2010 and LESS THAN $48 in 2011.
THUS - DRUMROLL PLEASE:
At current 870 on the S&P 500 the market is trading at 26 PE on 2009 OPERATING EARNINGS ( over 800 PE on 2009 "as reported earnings").
The PE on operating earnings should be 16 AT BEST (some would say 12).
That equates to an S&P 500 level of 528 (worst CASE 396). Expect to see 528 by August 2008.
And don't forget with 2008 Q4 OPERATING EARNINGS of ($.11) trailing twelve month operating earnings will be $29 and trailing twelve month "AS REPORTED EARNINGS" will be roughly a LOSS OF $14 per share.
To be precise S&P 500 528 by August 20th!
Could see Mid 400's and THE BOTTOM in the first half of 2010.
Nice post. And just like last year after BearStearns imploded every small rally was met with the same buy side analyst saying Bear Stearns was a one time event the Bot. is in and everyone else is fine.