(Reuters) – 1/BANKING ON RECOVERY
After U.S. Q2 results beat expectations, Q3 will show whether dire forecasts for companies’ bottom lines were justified.
Most sectors will again show steep drops in earnings but it should be less dramatic than the previous quarter; expectations are for an average 21% decline, versus the 31% contraction of Q2, when coronavirus-linked lockdowns decimated economic activity.
Energy companies are seen faring worst, with earnings down 115% from a year ago, according to Refinitiv. Tech earnings are predicted to fall just 0.5% percent.
Banks — Citi and JPMorgan report on Tuesday — may see earnings slip 19% on average but there is hope that after two quarters of hefty provisioning against bad loans, potential loan losses have mostly been covered.
(Graphic: Wall Street braces for lower earnings – https://fingfx.thomsonreuters.com/gfx/mkt/qzjvqnrdxpx/Pasted%20image%201602175244692.png)
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