Earning picture for 2006
Measured either by total net income growth, or by the growth rate of the median firm, the S&P 500 is expected to post double-digit growth for both 2005 and 2006. However, on a median basis, earnings growth is expected to decelerate from 13.4% in 2005 to 12.5% in 2006, while on a total net income basis, growth is expected to rise to 13.4% from 10.6% in 2005. The differences between these measures indicates a somewhat better performance for mid- to large-cap companies in 2005, but a better relative earnings performance expected in 2006 for mega-cap companies. For 2005 earnings growth has largely been about the energy sector, which accounts for 42.6% of the overall earnings growth, with only two other sectors pitching in double-digit contributions to the total growth (Industrials 15.2%, and Financials 13.5%). For 2006, the growth is expected to be much more balanced with five sectors making double-digit contributions to the total incremental earnings pie and the incremental earnings more closely matching the total 2005 earnings.
No comments:
Post a Comment