Corporate profits for Q4, 2007 are shaping up to appear downright UGLY. Compared to the year ago period, Thompson Financial says S&P 500 earnings will be off more than 20%. You have to look under the hood to get more details. If you strip out financials, and their massive write-downs, the result is a robust +11% gain.
In the third quarter of 2007, overall profits were +4.5%, excluding financials, they were +3%. The technology sector was extremely strong in Q4, showing the best pop among major sectors, +26% versus the year ago period. After tech's big gains, we have Energy coming in with +19%, Healthcare +17%, and Utilities +13%.
Get set for a tepid first half of 2008, but the Fed rate cuts and a recovery in the financials should support huge gains in S&P 500 earnings in the back half of the year.
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