Analysts upbeat about Q2 earnings growth

Macroeconomic data positive even though US profit growth was slowed by global downturn.

By SHARON WROBEL
July 7, 2006 02:52
1 minute read.
arrow up biz 88

arrow up biz 88. (photo credit: )

 
X

Dear Reader,
As you can imagine, more people are reading The Jerusalem Post than ever before. Nevertheless, traditional business models are no longer sustainable and high-quality publications, like ours, are being forced to look for new ways to keep going. Unlike many other news organizations, we have not put up a paywall. We want to keep our journalism open and accessible and be able to keep providing you with news and analyses from the frontlines of Israel, the Middle East and the Jewish World.

As one of our loyal readers, we ask you to be our partner.

For $5 a month you will receive access to the following:

  • A user uxperience almost completely free of ads
  • Access to our Premium Section and our monthly magazine to learn Hebrew, Ivrit
  • Content from the award-winning Jerusalem Repor
  • A brand new ePaper featuring the daily newspaper as it appears in print in Israel

Help us grow and continue telling Israel’s story to the world.

Thank you,

Ronit Hasin-Hochman, CEO, Jerusalem Post Group
Yaakov Katz, Editor-in-Chief

UPGRADE YOUR JPOST EXPERIENCE FOR 5$ PER MONTH Show me later Don't show it again

Analysts are upbeat about earnings growth in the second quarter on the back of a strong Israeli economy and positive macroeconomic data even though US profit growth was slowed by the global economic downturn. "Earnings growth figures for the second quarter are expected to be good overall as the domestic economy is continuing to grow and unemployment is coming down," said Richard Gussow, senior analyst at Excellence Nessuah. Commenting on where the Israeli stock market was moving, Gussow's colleague Dan Farhi said there was a good chance that, once emerging markets stabilize, the TA-25 would increase by 15 percent towards year-end, and possibly rise above the 900-mark on the back of excellent corporate earnings results in the just completed quarter and one of the best macroeconomic years the country has seen. "High earnings growth is expected in the telecommunications sector, while retailers will see improved results as private consumption is up," Gussow noted. UBS analyst Joseph Wolf, meanwhile, said second-quarter earnings reports for the banks were expected to be good year-over-year, driven by positive sentiment in the domestic economy. "On my top list of recommendations are Bank Hapoalim, Delek Group, Israel Chemicals and Elbit Systems," Wolf said. Earnings results at Makteshim Agan Industries and Israel Chemicals, however, are anticipated to be flat, reflecting declining sales due to a downturn in the agrochemical market and the slow potash market. according to Gussow. Outside of Israel, the Standard & Poor's Investment Policy Committee said last week that, despite expectations of record operating earnings, it believed that the S&P 500's record 16 consecutive quarters of year-over-year, double-digit operating gains would end during the second quarter. "The recent market volatility reflects investors' concerns about a global economic slowdown, which will make management's guidance for the third quarter as important as the second quarter's actual earnings," said Sam Stovall, chief investment strategist at Standard & Poor's Equity Research Services, in a report. Yet, while earnings growth slowed in quarter, Stovall said it was important to note that the slowdown was not universal, with four sectors expected to report double-digit earnings: utilities at 28.08%; energy at 26.13%; materials at 13.82% and industrials at 10.57%. Earnings in the information technology sector were projected to fall year-over-year, while all other sectors are expected to report single-digit growth.

Related Content

The Teva Pharmaceutical Industries
April 30, 2015
Teva doubles down on Mylan, despite rejection

By GLOBES, NIV ELIS