The second-quarter earnings season has gotten off to a strong start, but it's been no match for bears who are less than thrilled with future earnings prospects.
More than half of the companies on the Standard & Poor's 500 Index have reported second-quarter earnings results. And so far, they've been strong, with two-thirds of those companies beating earnings estimates, three-fifths beating on sales and almost half beating on both earnings and sales.
As a result, the consensus second-quarter earnings per share estimate has climbed to $20.63 from $19.60 at the beginning of the month. Merrill Lynch analysts expect final second-quarter earnings per share to come in at $20.75 - a 5% sequential improvement from the first quarter.
That would be a deceleration from the 15% sequential growth seen between the fourth quarter of 2009 and the first quarter of 2010, but it's good growth nonetheless. In fact, it puts 2010 S&P 500 earnings at about $83 per share. And at current prices, that gives the market a price-to-earnings multiple of just 13.3-times - below the long-term historical average of 15.
Merrill Lynch
Article Index
Strong Second-Quarter Earnings Can't Keep the Bears at Bay
CIT Taps Former Merrill Chief Thain as New CEO
In a move that unites two prominent casualties of the financial crisis, CIT Group Inc. (NYSE: CIT) ended a prolonged search by naming John Thain, the former chief of Merrill Lynch & Co., as its new chairman and chief executive officer.
Thain, who left Bank of America Corp. (NYSE: BAC) 13 months ago amid controversy over its takeover of Merrill, will have his hands full rebuilding CIT, an embattled commercial lender that nearly collapsed in 2009.
CIT still operates under restrictions that were imposed after receiving $2.3 billion in funding under terms of the Troubled Asset Relief Program (TARP). Those measures include being banned from the commercial paper market, its traditional source of funding.
Thain, who left Bank of America Corp. (NYSE: BAC) 13 months ago amid controversy over its takeover of Merrill, will have his hands full rebuilding CIT, an embattled commercial lender that nearly collapsed in 2009.
CIT still operates under restrictions that were imposed after receiving $2.3 billion in funding under terms of the Troubled Asset Relief Program (TARP). Those measures include being banned from the commercial paper market, its traditional source of funding.
Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. AIG Selling Taiwan Life Insurance Unit; Source: Comcast Proposes NBC Universal JV; China Auto Sales up 78% in Sept.; Whitney Cuts Goldman to Neutral; Bank of America Turns over Merrill […]
Investment News Briefs
With our investment news briefs, Money Morning provides investors with a quick overview of the most important investing news stories from all around the world. Australia Raises Rates; Societe Generale Raising $7.1 Billion; GrainCorp. Buying United Malt Holdings; Caterpillar Raising Prices 2% in Jan.; Samsung 3Q Profit Doubles; Merrill Bull Logo Returning; Euro Leaders Want […]
Boom, Bust and Rebuild: Bank of America and the Kenneth Lewis Legacy
There are many ways to view Kenneth Lewis' eight-year reign as Bank of America Corp. (NYSE: BAC) chief executive, but two seem to hold the most landscape. On one hand, the $130 billion he spent on acquisitions - FleetBoston Financial Corp., MBNA Corp., LaSalle Bank Corp., Countrywide Financial Corp., Charles Schwab Corp.'s (Nasdaq: SCHW) U.S. […]
U.S. Stocks: Winning Streak is Over, But Bull Market Continues
The winning streak is over. But the outlook for stocks remains upbeat. U.S. stocks on Friday suffered their first setback after six straight days of gains, but the damage wasn't severe. No news appeared to precipitate the decline, so chalk it up to light profit-taking. In the Friday session, the Dow Jones Industrial Average lost […]
Merrill Lynch Turns to Temasek for Another Stock Purchase, Unloads $31 billion in CDOs
By Jason Simpkins Associate Editor Merrill Lynch & Co. Inc. (MER), the third-largest U.S. securities firm, has announced a plan to shore up its credit ratings and raise capital by offloading $31 billion in collateralized debt obligations (CDOs), issuing an $8.5 billion stock offering, and courting yet another cash infusion from Temasek Holdings Pte., Singapore's […]
Goldman’s Crystal Ball: Citigroup, Merrill are in Serious 2Q Trouble

Merrill: Foster's Could be Next Candidate for Beverage Buyout
By Mike Caggeso Associate Editor The whirlwind of recent beverage buyouts may continue, as Foster's Group Ltd. (OTC: FBRWY) - Australia's biggest beer and wine maker - may be a takeover target after it conducts a review of its wine business. That assessment didn't come from the company, however, but rather Merrill Lynch & Co. […]
Merrill Misses Expectations, Thain's Mettle to be Tested
By Mike Caggeso Associate Editor Merrill Lynch & Co. (MER) ripped the Band-Aid off its investors today (Thursday), when it posted its third consecutive quarterly loss and announced 3,000 job-cuts in its first-quarter earnings statement. The third-largest U.S. securities firm lost $1.96 billion, or $2.19 a share, compared to a $2.16 billion gain, or $2.26 […]
Merrill Lynch is the Latest Beneficiary of Global "Cash Barons" Move on U.S. Financial Services Sector
By Jennifer Yousfi And Jason Simpkins Money Morning Editors Merrill Lynch & Co. Inc. (MER) announced Monday that it will receive a needed cash infusion of $6.2 billion - most of it from Singapore's state-run Temasek Holdings. Temasek, a sovereign-wealth fund, will invest up to $5 billion, while the remainder will come from Davis Selected […]
Merrill Lynch Fund Moves In To A New Neighborhood
From Staff Reports DLF Ltd., the largest real estate company in India, announced the sale of a minority stake in several of its assets yesterday (Tuesday). According to Bloomberg News, the divestiture brought in $426 million dollars for a total of eight housing projects located throughout India. DLF sold a 49% stake in seven housing […]
Troubled Merrill Lynch Taps NYSE Head John Thain as its New CEO
By Mike CaggesoAssociate Editor A Wall Street investment bank yesterday (Thursday) upgraded its ratings on Merrill Lynch & Co., Inc. (MER) after the company announced it filled its empty chief executive officer slot with John Thain, CEO of the NYSE Euronext (NYX). Credit Suisse Group (CS) raised its rating of Merrill Lynch shares from "Neutral" […]
O'Neal Finally Out at Merrill Lynch
By Jason SimpkinsAnd William Patalon IIIMoney Morning Editors Just days after reporting the biggest quarterly loss in its history, Merrill Lynch & Co Inc. (MER) yesterday (Tuesday) forced out Chairman and Chief Executive E. Stanley "Stan" O'Neal, ending days of speculation about the embattled executive's fate. The New York-based Merrill has, in recent weeks, […]
Embattled Merrill Lynch CEO Ousted Over Losses, Merger Overtures
By Jason Simpkins And William Patalon III Money Morning Editors Stan O'Neal, the embattled chief executive officer of Merrill Lynch & Co. Inc. (MER) will be ousted at any time, with only the terms of his departure still to be finalized, according to published reports. Although some early reports yesterday (Monday) stated that O'Neal had […]