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BofA has a nice take on where earnings are going.
1Q isn’t about 1Q. Expect big cuts for full year
S&P 500 1Q consensus EPS was cut 6% YTD to $50.70 (-7% YoY), more than the average -4% pre-season cut. Macro indicators started the year strong but slowed after SVB news. We forecast an in-line quarter, but the focus will be on guidance and tighter credit conditions impacting capex/buybacks (more below). Consensus tends to cut estimates one quarter at a time. Post 2000, quarterly EPS was cut five quarters in a row by 12% on avg. ahead of each season; post-GFC, six quarters in a row by 20% on average. 1Q EPS has been slashed 6%, but 2H EPS saw just a paper cut.
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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific's leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
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