S&P 500 Profit and Sales in the Third Quarter Expected to Decline for the First Time in Three Years
The Paragon Report Provides Stock Research on Cummins and NIKE
NEW YORK, NY--(Marketwire - Oct 12, 2012) - The S&P 500 Index has clumped for 4 consecutive days as the International Monetary Fund have cut its global growth forecast. The IMF forecasts the global economy will expand by 3.3 percent in 2012, down from their previous estimate of 3.5 percent. The Paragon Report examines investing opportunities in the S&P 500 Index and provides equity research on Cummins Inc. (NYSE: CMI) and NIKE, Inc. (NYSE: NKE).
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Aggregate 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. The data has showed that earnings per share and sales are expected to drop on average 1.7 percent, and 0.6 percent, respectively.
"Weaker economic data over the past 12-18 months has steadily eroded the growth outlook," said Jonathan Golub, a strategist at UBS. "Unfortunately, this weakness is relatively broad-based. More specifically, earnings are now expected to come in lower than 3Q11 in 5 of 10 sectors, with the greatest contractions in Energy and Materials."
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Cummins designs, manufactures, distributes, and services diesel and natural gas engines, and engine-related component products worldwide. Shares of Cummins fell 3.36 percent in Wednesday trading after the company lowered its revenue and profit targets for the year. "We continued to see weak economic data in a number of regions during the third quarter increasing the level of uncertainty regarding the direction of the global economy," said Tom Linebarger, Chairman and CEO.
Nike reported net income for the fiscal first quarter 2013 fell 12 percent to $567 million, compared to $645 million in the year ago quarter. After 9 consecutive quarters of gains the company has reported a decline in profits for the last two quarters. "There are some very real pressures in this world, and in this market, that even a company with the size and sophistication of Nike can't avoid," Camilo Lyon, an analyst for Canaccord Genuity Corp. said before the results.
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