European earnings: Blink and you’d miss it

It is often said that corporates are the last to see signs of market deterioration, and therefore caution should be exercised when interpreting guidance statements. However, the market appears to be taking solace from recent rhetoric. So far this quarter 67% of companies have maintained full-year guidance, 19% have raised and only 14% expect to deliver worse results. Subsequently this is having an impact on shares.
Companies that lift guidance outperform by 2.2% on the day; those that cut underperform by 3.6%. On top of that, companies that lift guidance have seen estimates increased by c.5% this quarter; those that cut have seen 7% downgrades.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.

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