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No Revenue Growth Suggests Recession, According to Leading Financial Newsletter

281 views  2012-08-14 04:16   Tagscompanies  2001  produced  reported  Michael 
More than half of the S&P 500 companies have reported earnings for the second quarter of 2012, and according to Michael Lombardi, lead contributor to Profit Confidential, thus far, the ratio of negative-to-positive forecasts has produced the highest negative reading since 2001.

In the article “Negative Revenue Growth for S&P 500 Companies Signals Recession,” Lombardi notes that the earnings outlook has been so poor that analysts have had to take down S&P 500 revenue estimates for the coming third quarter.

“For the second quarter, analysts were expecting revenue growth for the S&P 500 of eight percent year-over-year,” says Lombardi, “but, thus far, it has only produced growth of 1.2%,”

Lombardi notes that this is the slowest year-over-year growth since the recession began over four years ago.

“The negative earnings outlook by corporations in the S&P 500 has forced analysts to change their high single-digit revenue growth forecast for the third quarter to a negative 0.4%,” says Lombardi. “That’s negative revenue growth year-over-year.”

This means that, for the last three quarters, revenue growth in the S&P 500 has declined steadily and dramatically.

Historically, Lombardi says, when revenue growth has been negative year-over-year for S&P 500 corporations, it is usually followed by a recession.

Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $300 an ounce. In 2006, it “begged” its readers to get out of the housing market...before it plunged.

Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.

To see the full article and to learn more about Profit Confidential, visit www.profitconfidential.com.

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