The gamed nature of earnings estimates… Bianco

June 2, 2016 by Jim Colburn Leave a Comment

From James Bianco, via Ritholz (http://ritholtz.com/2016/06/historical-look-earnings/):

“In a nutshell, analysts often offer more optimistic earnings estimates early in a quarter only to be guided lower by company guidance as the actual quarterly release draws closer.”

“The trend in these series is another way of showing the gamed nature of earnings. While analysts undoubtedly gather more information as a quarterly release draws near, allowing them to offer a more accurate estimate, perhaps earnings estimates are more honest 120 days prior to an actual earnings release since the percentage of companies that beat estimates vacillate around 50%. Presumably this would be the time that analysts would be able to offer their opinion without much influence from company guidance.”

And here is the most recent earnings season:

Commodity Research Group (CRG), founded by veteran analyst Edward Meir, is an independent research consultancy specializing in base and precious metals, as well energy products. The Group provides research and general price analysis for these markets, along with advice to companies seeking to construct commodity hedging strategies.

Our associates bring decades of experience to the table, as they seek to help our clients understand the markets. CRG will distill the myriad of pricing variables mentioned above into coherent research that is to-the-point and tailored to a clients hedging or pricing needs. In addition, CRG is available for consulting assignments and speaking engagements. CRG does not manage money or trade for itself.

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