The bulk of corporate earnings results for the second quarter of 2003 from S&P500 companies are now in and equity bulls are claiming that they justify the sharp equity rally since mid-March. I’m not convinced. More companies beat analysts’ expectations, but then estimates had been revised down sharply.
The reality is that the 9% year-on-year rise in second-quarter earnings is actually less than that in the first quarter. And much of that was accounted for by cost-cutting and currency gains rather than top-line sales growth.
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