Earnings Etc.

Wall Street is rallying today as JPMorgan Chase, Wells Fargo, Coca-Cola, and a few others turn in respectable first-quarter results. A 200-plus gain in the Dow is always welcome, but hopes for a sustained round of surprises may be short lived. At a Lipper press event this morning, Reuters Estimates' Ashwani Kaul reminded us that the final tally will still equal a tarnished quarter.

"First-quarter earnings are going to be an absolute disaster," he said, predicting a 14 percent year-over-year decline in S&P 500 earnings, with most of the damage coming from financials.

That echoes a 50 percent drop in JPMorgan's quarterly net income and a 35 percent slump in its investment banking business. Its shares rose almost 5 percent at midday as results bested analysts' worst fears.

That sort of earnings disaster is largely confined to industries hit by the credit crisis. Excluding financials, quarterly results are slated for an 8 percent gain. Some companies, like Coke, managed a decent showing despite a U.S. slowdown. There, international sales equaled a 19 percent profit gain in the quarter. Looking ahead, Kaul sees some hope that the third and fourth quarters will be "really, really good from an earnings perspective."

With IBM and eBay reporting after the close and Merrill Lynch said to be considering more write-downs with its earnings release tomorrow, it should continue to be an interesting week in the markets.

Tags: stocks | Wall Street | stock market

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