The stars of the last quarterly earnings season are due to fall back to earth as the number of companies reporting third-quarter results gears up next week.
A slowdown in bond trading means analysts expect big banks to report flat earnings from a year ago. Consider that in the second quarter, earnings for financial companies jumped 27 percent – the most among the 10 sectors of the Standard & Poor’s 500 index, according to S&P Capital IQ.
JPMorgan Chase reports its latest results on Oct. 11, traditionally one of the first in the Dow Jones industrial average to do so.
Analysts are forecasting an 11 percent drop in earnings per share. If they’re right, it would be the first decline in five quarters.
Analysts expect the S&P 500 to report earnings growth of 3.2 percent for the third quarter, due in part to a rise in interest rates and oil prices. It would mark a slowdown from 4.9 percent growth in the second quarter and the weakest pace in a year.
To be sure, analysts often underestimate corporate earnings. As reporting began for the second quarter, analysts projected six of 10 sectors would post earnings declines. Only four did and earnings growth for the index was 71 percent higher than forecast.
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