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April 16, 2008

All Business: Earnings estimates deserve skepticism

  • General Electric's massive profit miss last week should be reason enough to be wary about optimistic views for the rest of this year.
    • By RACHEL BECK
    AP Business Writer

    NEW YORK — If we use analysts' estimates for corporate earnings to gauge the economy's health, we all should be ready to celebrate better times by the end of the year.

    Look at their forecasts for the second half of 2008: Profit gains for Standard & Poor's 500 companies in the third quarter are expected to top 14 percent and the fourth quarter could bring a year-over-year surge of 55 percent. That sure sounds like a happier economic world than the one we are living in right now.


     
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