NEW YORK — With the end of the June quarter in sight, earnings will be the decisive factor for investor insight into the second half of the year, with some analysts in recent days hiking estimates for second-quarter results.
Still, average earnings on the S&P 500 are expected to decline more than 30 percent in the quarter that ends this month versus the year-ago period, and projected earnings per share have fallen nearly 4 percent from where expectations stood at the end of March, analysts said.
Earnings estimates fell rapidly in the first quarter and into the second, but have stabilized over the past few weeks, according to Howard Silverblatt, senior index analyst at Standard & Poor’s.
Average earnings per share on the S&P 500 for the coming quarter stand at $14.31, off 53 cents, or 3.6 percent, from the $14.84 estimated at the end of March, said Silverblatt.
Health care stocks are expected to contribute the biggest piece, more than 19 percent, of second-quarter EPS, followed by consumer staples, at 14.3 percent.
“This isn’t an easy game to play right now,” said Dan Greenhaus, an analyst at Miller Tabak, pointing to the late Thursday release of quarterly results from Research In Motion Ltd., as illustrating the difficulties.
Stock in the BlackBerry maker fell nearly 5 percent Friday after the company issued a moderate forecast that disappointed investors.
On average, S&P 500 earnings are expected to be down nearly 34 percent in the second quarter from the year-ago quarter. And, while earnings for financials are expected to fall year-over-year again, recent revisions have pushed up estimates, Greenhaus said.
In recent weeks, analysts have raised forecasts for 490 companies and lowered forecasts for 457 — working out a net positive 33, or 2.2 percent, according to analysts at Bespoke Investment Group.
Sectors remain evenly split between positive and negative, with consumer staples and energy leading, and industrials and materials lagging.
Energy stocks are reaping the benefits of higher energy prices, while rising commodity prices haven’t been as helpful to analysts’ views of stocks in the materials sector, wrote Bespoke analysts in a note Friday.
On Friday, consumer-discretionary, financials and information technology shares fronted the gains and telecommunication services, utilities and energy shares led the losses as the major indexes trimmed an earlier advance, with all three headed to weekly losses.
The Dow Jones industrial average fell 15.87 points, or 0.2 percent, to 8,539.73, leaving the blue chips down 3 percent for the week.
The S&P 500 Index gained 2.86 points, or 0.3 percent, to 921.23, translating into a 2.6 percent loss from the week-ago close.
The Nasdaq Composite Index added 19.75 points, or 1.1 percent, to 1,827.47, with the technology-laden index taking a 1.7 percent hit on the week.
