Investors can find such funds by checking out the entire list of the Zacks #1 Rank Energy Equity Funds.

3 Hot Picks

ICON Energy (ICENX) seeks long-term capital appreciation. It invests at least 80% of its net assets in equity securities of companies in the energy sector which are traded in the U.S.

The fund adopts a quantitative methodology to identify securities that are under priced relative to value. The U.S. equity securities in which the fund may invest include common and preferred stocks of companies of any market capitalization.

Unit holders need to make a minimum initial investment of $1,000 to enter this Zacks#1 Rank (“Strong Buy") fund. It distributes dividends and capital gains, if any, annually.

Derek Rolligson has been lead manager of the fund since May 2007. Rolligson was with Navigant Consulting from 1997 to 2000 as a research analyst in corporate litigation.

DWS Climate Change A (WRMAX) was incepted in September 2007. The investment seeks maximum return (growth of capital and income).

The fund is permitted, but not required, to invest up to 30% of assets in various types of derivatives, particularly futures. As of February 2009, its portfolio turnover was 126%.

Nicolas Huber has been lead manager of the fund since September 2007. Suntech Power Holdings (STP) and Itron Inc. (ITRI) are among the fund’s key holdings.

Munder Energy A (MPFAX) was incepted in March 2001. The fund invests in equity securities of U.S. and non-U.S. companies which significantly benefit from or derive revenue from non-regulated energy or power-related activities.

The fund invests in small, medium, and large capitalization companies. The fund may invest without limit in IPOs.

Brian Kozeliski has been lead manager at the fund since February 2009. Kozeliski is a Chartered Financial Analyst and has been with the firm since 2005.

Discover Many More Funds

Learn more about the new Zacks Mutual Fund Rank and discover some of the best market-beating mutual funds by browsing our mutual funds section. This part of Zacks.com offers a variety of tools, including mutual fund research, a new mutual fund screener, helpful answers to frequently asked questions and quick access to prospectuses and other information.

By applying the Zacks Rank to mutual funds, investors can find funds that not only outpaced the market in the past but are also expected to outperform going forward.

Company Description

Global Partners LP, through its subsidiaries, engages in the wholesale and commercial distribution of refined petroleum products and natural gas in the United States and internationally. The company has a market cap of $338 million.

Shares of SWM are up big over the last 6 months as energy prices have shot higher with the market. The company's better than expected second-quarter results, reported on August 6, also provided an extra boost.

Second-Quarter Results

Earnings came in at 7 cents per share, 5 cents ahead of the Zacks Consensus Estimate. The company has beat in each of the last 3 quarters. Earnings before interest, taxes, depreciation and amortization were up 26% to $8.6 million while distributable cash flows up 46% to $3.3 million.

Estimates Are Up

Estimates have been trending higher for the last few months, with the current year up 14 cents to $2.56 per share. The next-year estimate is a bit anemic, projecting 4% earnings growth, but the energy sector continues to be volatile, so that number could fluctuate.

Valuation

In spite of the big gains, shares of GLP still have value, trading at 10X projected current-year earnings.

The Chart

Shares of GLP have been rallying since bottoming out just above $8 in early March. More recently, shares hit a new 52-week high after breaking above some short-term resistance at $26. Take a look below.

Zacks Investment Research

The Vancouver-based company had $278 million of cash in hand at the end of the second quarter. With the new credit agreement and no near-term refinancing requirements, Methanex has positioned itself well to meet its financial commitments and continue investing in projects that stimulate growth.

Methanex is the world's largest supplier of methanol to major international markets in North America, Asia-Pacific, Europe and Latin America, with about a 15% market share.

The chemical Methanol is a blend of 68% natural gas and 32% coal. Natural gas costs have been rising resulting in higher cost of producing methanol. In 2008, the company’s cash costs of producing methanol increased by $73 million due to higher natural gas costs.

Approximately 80% of all methanol output is used for production of formaldehyde, acetic acid and a variety of other chemicals, demand for which is influenced by the levels of global economic activity. These chemical derivatives are used in the manufacture of a wide range of products including plywood, particleboard, foams, resins and plastics.

The remainder of methanol demand largely stems from the energy sector for the production of methyl tertiary-butyl ether (MTBE) – a gasoline component – and as a direct fuel for motor vehicles. Use of methanol in manufacturing bio-diesel and dimethyl ether (DME) in power generation and other applications is also on the rise.

Methanex has embarked on a number of growth projects including the one on alternative natural gas sources in Chile. However, lower demand and pricing, as well as an increase in worldwide inventories of methanol due to the global economic crisis are negatively affecting the company. We maintain our neutral recommendation on the stock.

Revenues more than halved to $245.5 million from $600 million in the same quarter of the previous year. About 80% of all methanol output is used in the production of formaldehyde, acetic acid and a variety of other chemicals, demand for which is influenced by the levels of global economic activity. These chemical derivatives are used in the manufacture of a wide range of products including plywood, particleboard, foams, resins and plastics. The remainder of the demand for methanol largely stems from the energy sector for the production of methyl tertiary-butyl ether (MTBE), a gasoline component and a direct fuel for motor vehicles.

The global economic slowdown led to a significant reduction in methanol demand and an increase in inventories across the world. This resulted in a decrease in contract methanol pricing during the fourth quarter of 2008 and into 2009.

Sales volumes totaled 1.4 million tons, down 12.5% year over year from 1.6 million tons. The non-discounted posted methanol price for the second quarter of 2009 was $211 per ton compared with $489 per ton for the second quarter of 2008 and $216 per ton for the first quarter of 2009. The average realized price for the second quarter of 2009 was $192 per ton compared with $412 per ton for the second quarter of 2008 and $199 per ton for the first quarter of 2009.

Cost Control

Despite lower prices and volumes, Methanex managed to curtail losses by checking costs. Total cash costs for the second quarter of 2009 were $20 million lower compared with the first quarter. Methanex closed many high costs facilities especially in China, where the company aims to shut down about 6 million tons of high-cost methanol capacity by 2009. The company is also hoping for further cost reduction with the upcoming low cost 1.3 million ton methanol plant in Damietta, Egypt. The plant is expected to start operations in 2010.

We rate the stock a Hold with a six-month target price of $17.50.

Chicago, IL – July 27, 2009 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Exxon Mobil (XOM), Chevron (CVX), Travelers Companies (TRV), Verizon (VZ), Walt Disney (DIS), Apache (APA), Corning (GLW), Life Technologies (LIFE) and Western Digital (WDC). To see more earnings analysis, visit http://at.zacks.com/?id=3207.

Every day, Zacks.com makes 4 stock picks available, free of charge. To see them, go to http://at.zacks.com/?id=5612.

This Week's Events

Nearly 750 companies will report, of which 144 are in the S&P 500. Dow components include Exxon Mobil (XOM), Chevron (CVX), Travelers Companies (TRV), Verizon (VZ) and Walt Disney (DIS).

The energy sector will be prominent with 57 oil and gas firms releasing results.

Competing for investor dollars will be the U.S. government. A record $115 billion in 2-, 5- and 7-year bonds plus index-adjusted treasuries (TIPS) will be auctioned this week. In addition, there will be several auctions of short-term bills. June's large auctions were met with strong demand, but at some point, the new supply is going to drive up yields.

We'll get our first look at second-quarter GDP on Friday. The consensus estimate calls for a 1.5% contraction, though Zacks Equity Research is predicting a 1.4% decline.

The Fed's periodic Beige Book will be published on Wednesday afternoon.

• Monday: New home sales
• Tuesday: July Conference Board Consumer Confidence, S&P/Case-Schiller Home Price Index
• Wednesday: June durable goods orders, Federal Reserve Beige Book, weekly crude inventories
• Thursday: weekly initial jobless claims
• Friday: Advance Q2 GDP, July Chicago PMI

San Francisco Fed President Janet Yellen will discuss her economic outlook with the Idaho/Oregon Bankers Association on Tuesday morning. New York Fed President William Dudley is scheduled to speak to the Association for a Better New York on Wednesday. He will also discuss the economy.

The big question is whether the market can sustain its upward momentum. Though volume has largely remained below average - and continues be significantly less than what we saw in April - stocks are in a bullish mode. Plus, 4.6 companies have topped expectations for every one that has missed - a high proportion.

Understand, however, that what we're seeing is mostly a game of hot potato. Fast money is moving the markets and can change direction without warning.

Companies That Could Issue Positive Earnings Surprises

Four brokerage analysts raised their second-quarter forecasts on Apache (APA) within the past 7 days. The revisions bring the total number of positive changes made over the past 30 days to 9. Combined, the new forecasts have pushed the consensus earnings estimate 16 cents higher to $1.00 per share. The most accurate estimate is more bullish at $1.07 per share.

APA has beat twice and missed twice during the past 4 quarters, so there is some risk to this call, but you have to like the rising forecasts. Apache is scheduled to report on Thursday, Jul 30, before the start of trading.

Corning (GLW) twice raised its guidance for second-quarter LCD glass volume. The revisions have led to a steady increase in the average forecast. The consensus earnings estimate of 30 cents per share is 5 cents above the average forecast of a month ago. The most accurate estimate is even more bullish at 32 cents per share. GLW has topped expectations during 2 out of the last 3 quarters, though its fourth-quarter results were disappointing. Corning is scheduled to report on Monday, Jul 27, before the start of trading.

Life Technologies (LIFE) has topped expectations for 10 consecutive quarters. Recent, positive revisions by 3 covering brokerage analysts suggest the company could beat again. The second-quarter consensus earnings estimate of 66 cents per share is a penny above the average forecast of a week ago. The most accurate estimate is more bullish at 68 cents per share. Life Technologies is scheduled to report on Tuesday, July 28, after the close of trading.

Western Digital (WDC) has topped expectations by an average margin of 16 cents per share during the past 4 quarters. Brokerage analysts are anticipating another comparatively good report, as 5 have raised their second-quarter forecasts within the past 30 days. The revisions have resulted in a 5-cent increase in the consensus earnings estimate, pushing it up to 27 cents per share. The most accurate estimate is more bullish at 33 cents per share. Western Digital is scheduled to report on Tuesday, Jul 28, after the close of trading.

Companies That Could Issue Negative Earnings Surprises

Eight analysts have cut their second-quarter projections on Chevron (CVX) within the past month, including 3 during the past week. The negative revisions caused the consensus earnings estimate to fall 20 cents to 97 cents per share. The most accurate estimate is more bearish at 94 cents per share. CVX has missed twice during the past 4 quarters. Chevron is scheduled to report on Friday, Jul 31, before the start of trading.

Charles Rotblut, CFA, is the senior market analyst for Zacks.com.

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +26%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 111% annually (-0.8% versus +8%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5614.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=5615.

Follow us on Twitter: http://twitter.com/zacksresearch

Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Charles Rotblut, CFA
Company: Zacks.com
Phone: 312-265-9352
Email: pr@zacks.com
Visit: www.Zacks.com

Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: http://at.zacks.com/?id=4579.

Here are highlights from Tuesday's Analyst Blog:

Will Oil Prices Prevent a Recovery?

Higher oil prices are coming at a time when the economy is still very fragile. Retail spending on goods other than energy face strong headwinds from both the need for consumers to rebuild their personal balance sheets (pay down past debts and build up savings) and from much worse personal income statements (unemployment, hours and wages cut, lower interest rates on savings).

This is just one more unhelpful factor that will pressure sales, particularly for stores that sell discretionary items, including clothing stores like The Gap (GPS) and appliance stores like Rex Stores (RSC) and HH Gregg (HGG). Higher oil prices are of course good news for the energy sector, but for the overall economy high energy prices are a significant negative.

The rise in oil prices does not seem to be consistent with the overall weakness of the world economy, but there are several reasons why it just may be sustained or extended, even in the absence of a global economic rebound. The first is that oil is a good hedge against future inflation, and given the expansion of the Fed balance sheet, that may be a very serious concern down the road. Currently the bigger threat is deflation, but it will be hard for the Fed to sop up all the liquidity that has been created to fight the deflationary fire.

A second and somewhat related reason is that China has been increasing its purchases of all sorts of commodities, trying to take advantage of the lower prices (note that the price of other commodities like copper have also increased sharply from the lows of last winter, but remain well off the highs of last summer). OPEC has also shown greater discipline this time around than they have in the past. How long that will last nobody knows, but so far they have been keeping it together.

The third reason is that the looming danger of peak oil has not gone away, it has only been masked by "peak demand" caused by the economic downturn worldwide. Any incremental oil is now coming from very expensive sources like the Canadian oil sands or the very deep waters of Brazil, both of which require oil prices in the mid-$60's to be economically viable.

With oil prices rising above those levels, the drilling off Brazil should pick up steam. There are, however, very few rigs capable of drilling at such depths. Most of those are controlled by two firms, Transocean (RIG) and Diamond Offshore (DO), both of which will benefit enormously if oil prices stay high.

Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: http://at.zacks.com/?id=2649.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=2677

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leonard Zacks. As a PhD in mathematics Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at http://at.zacks.com/?id=4580.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact:
Mark Vickery
Web Content Editor
312-265-9380
Visit: www.zacks.com

The electric power industry is one of the world's largest industrial segments. With a global market share of approximately 25%, the United States is the leading producer of electricity, followed by China, Japan and Russia. Total global electricity consumption volume grew at a CAGR [compound annual growth rate] of 3.1% from 1980 to 2006, the most recently available information, according to the Energy Information Administration of the United States Department of Energy.

Meanwhile, over the same period, total global installed electricity capacity increased at a slower rate of only 2.8%. Given industry forecasts of continuous increases in demand, this supply shortfall must be met by additional energy sources. Worldwide demand for electricity is expected to increase from 14.8 trillion kilowatt hours in 2003 to 27.1 trillion kilowatt-hours by 2025, according to the United States Department of Energy's International Energy Outlook. (Source: Energy Information Administration, US Department of Energy)

Investment in electric generation, transmission and distribution to meet growth in demand (excluding investment in fuel supply) is expected to be approximately $11 trillion by 2030, according to the International Energy Agency. However, the desire for energy independence, fossil fuel supply constraints, infrastructure limitations and environmental concerns all pose challenges to meeting this growing worldwide demand for electricity.

Electricity generated by burning fossil fuels such as coal, natural gas and petroleum accounts for approximately 80% of commercial power production, nuclear reactors produce approximately 9% of commercial power, 6% is contributed by conventional hydroelectric conversion, while renewable resources such as solar, wind, biomass, geothermal, and hydroelectric power generation supply the remaining 5% of commercial power.

In recent years, however, the use of renewable resources in the U.S. has been increasing in response to the growing concerns over reliance on fossil fuels. As opposed to fossil fuels, which draw on finite resources and may eventually become too expensive to retrieve, renewable resources are generally unlimited in availability. Legislation in several states seek to require power production from renewable sources to be approximately 15% of commercial electric power. Bipartisan support for weaning the U.S. off its dependency on foreign oil is led by President-elect Barack Obama's pledge to create five million new jobs by heavily investing in renewable alternative energy sources. (Sources of Electricity in the US [2006] - Energy Information Administration, US Department of Energy)

The alternative energy industry includes solar panel manufacturers and wind farm operators, as well as software designers working on "smart" power grids and electric utilities with solar, wind, hydro and/or geothermal assets. While hydroelectric power generation currently has the largest installed base, solar and wind power generation have emerged as the most rapidly growing renewable energy sources.

While wind power has a promising long-term future with frequent proposals for new wind farms, there are very few publicly traded wind power companies. In the case of ethanol, high and rising corn prices have brought ethanol stocks out of favor with investors.

Solar Energy

Solar energy can be used to convert sunlight into heat, called solar thermal energy, or directly into electricity, known as photovoltaic (PV) energy. Solar thermal applications can be distributed, such as roof-mounted systems for heating swimming pools, or can be centralized where sunlight is concentrated to heat a medium that drives a turbine to generate electricity in large scale plants.

Electricity generated from solar thermal electric power plants requires large concentrators and turbines, which are not suitable for residential locations. We refer to solar power as the use of interconnected solar cells, as opposed to solar thermal technology, to generate electricity from sunlight. The interconnected cells are packaged into solar panels, which are mounted in areas with direct exposure to the sun, such as rooftops.

Solar power technology has been used to generate electricity in space program applications for several decades and in commercial applications over the last 30 years. Increasingly, government incentive programs are accelerating the adoption of solar power. Since 2001, the global market for solar power installed capacity has grown at a compound annual growth rate of approximately 40%, driven by strong growth in Germany, Spain, and the U.S.

According to SolarBuzz (a research and consulting firm), the global solar power market, as defined by solar power system installations, generated $17.2 billion in revenue in 2007 (the most recently available information), up 56% over 2006 global revenue. Such total global solar market installation revenue is expected to be within a range of $18.7 billion to $31.4 billion by 2011. On a generation output basis, 2007 global solar cell production also increased 56% year-over-year to 3,436 megawatts (MW); meanwhile, worldwide installations grew 62% to a record high of 2,826 MW. Germany is the global leader for PV installations (1,328 MW in 2007), followed by Spain (640 MW), Japan (230 MW) and the United States (220 MW).

T. Boone Pickens & the "Pickens Army"

In President Obama's Inaugural Address on January 20, 2009, T. Boone Pickens, Texas oilman, Chairman and CEO of BP Capital and Director of Clean Energy Fuels Corp. (CLNE), along with millions of Americans, heard our new President Obama pledge to transform U.S. energy policy. Mr. Pickens is committed to this goal and believes that the president's goals are bold yet achievable.

Mr. Pickens has inspired over 1 million volunteers, known as Pickens' Army, to pressure government for a change in energy policy. In addition, his role at Clean Energy Fuels is committed to convert commercial fleet vehicles to natural gas. Clean Energy Fuels Corp. (Clean Energy) is a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The Company offers a solution to enable customers to run their fleets on natural gas. It designs, builds, finances and operates fueling stations, and supplies customers with compressed natural gas (CNG) and liquefied natural gas (LNG).

The Obama Administration has already begun working with Congress on a stimulus plan to create more new jobs and return to economic growth by investing heavily in renewable energy sources such as solar and wind power, rebuilding the U.S. electricity transmission grid and ultimately reducing U.S. dependence on foreign oil and ending oil.

OPPORTUNITIES

Compared to other renewable energy technologies, solar power's benefits include:

• Environmental Advantage: Solar power is one of the most benign electric generation resources. Solar cells generate electricity without air or water emissions, noise, vibration, habitat impact or waste generation.
• Fuel Risk Advantage: Unlike fossil and nuclear fuels, solar energy has no risk of fuel price volatility or delivery risk. Although there is variability in the amount and timing of sunlight over the day, season and year, a properly sized and configured system can be designed to be highly reliable while providing a long-term, fixed price electric supply.
• Location Advantage: Unlike other renewable resources such as hydroelectric and wind power, solar power is generally located at a customer site due to the universal availability of sunlight. As a result, solar power limits the expense of, and energy losses associated with, transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environmentally friendly power alternative, solar power is the only viable choice because it can be located in urban and suburban environments.
• Retail Rate Benchmark Advantage: Unlike biomass, geothermal, hydroelectric and wind power generation, which are location-dependent and sell primarily to the wholesale market, solar power competes with retail electric rates as it is customer-sited and supplements a customer's electricity purchased at retail rates from the utility network.
• Peak Energy Generation Advantage: Solar power is well-suited to match peak energy needs as maximum sunlight hours generally correspond to typical peak demand periods when electricity prices are at their highest. These characteristics increase the value of solar power as compared to other renewable resources that do not align with peak demand periods.
• Modularity: Solar power products can be deployed in many sizes and configurations to meet the specific needs of the customer.
• Reliability: With no moving parts or regular required maintenance, solar power systems are among the most reliable forms of electricity generation.

WEAKNESSES

• The global economic crises will temper alternative energy sales and earnings growth.
• The immediate concerns over economic weakness likely takes the short-term focus off progress toward a new energy policy.
• Continued weakness in the debt and equity markets, for as long as it lasts, will raise costs of capital for firms in this emerging sector, and may prevent project financing, working capital requirements, and new research and development. Federal funding for a new energy policy will largely dry up.
• Alternative energy stock prices generally rise and fall in direct proportion to the price of crude oil. While in times of high oil prices this may also present an opportunity, it also increases volatility in the sector.

The electric power industry is one of the world's largest industrial segments. With a global market share of approximately 25%, the United States is the leading producer of electricity, followed by China, Japan and Russia. Total global electricity consumption volume grew at a CAGR [compound annual growth rate] of 3.1% from 1980 to 2006, the most recently available information, according to the Energy Information Administration of the United States Department of Energy.

Meanwhile, over the same period, total global installed electricity capacity increased at a slower rate of only 2.8%. Given industry forecasts of continuous increases in demand, this supply shortfall must be met by additional energy sources. Worldwide demand for electricity is expected to increase from 14.8 trillion kilowatt hours in 2003 to 27.1 trillion kilowatt-hours by 2025, according to the United States Department of Energy's International Energy Outlook. (Source: Energy Information Administration, US Department of Energy)

Investment in electric generation, transmission and distribution to meet growth in demand (excluding investment in fuel supply) is expected to be approximately $11 trillion by 2030, according to the International Energy Agency. However, the desire for energy independence, fossil fuel supply constraints, infrastructure limitations and environmental concerns all pose challenges to meeting this growing worldwide demand for electricity.

Electricity generated by burning fossil fuels such as coal, natural gas and petroleum accounts for approximately 80% of commercial power production, nuclear reactors produce approximately 9% of commercial power, 6% is contributed by conventional hydroelectric conversion, while renewable resources such as solar, wind, biomass, geothermal, and hydroelectric power generation supply the remaining 5% of commercial power.

In recent years, however, the use of renewable resources in the U.S. has been increasing in response to the growing concerns over reliance on fossil fuels. As opposed to fossil fuels, which draw on finite resources and may eventually become too expensive to retrieve, renewable resources are generally unlimited in availability. Legislation in several states seek to require power production from renewable sources to be approximately 15% of commercial electric power. Bipartisan support for weaning the U.S. off its dependency on foreign oil is led by President-elect Barack Obama's pledge to create five million new jobs by heavily investing in renewable alternative energy sources. (Sources of Electricity in the US [2006] - Energy Information Administration, US Department of Energy)

The alternative energy industry includes solar panel manufacturers and wind farm operators, as well as software designers working on "smart" power grids and electric utilities with solar, wind, hydro and/or geothermal assets. While hydroelectric power generation currently has the largest installed base, solar and wind power generation have emerged as the most rapidly growing renewable energy sources.

While wind power has a promising long-term future with frequent proposals for new wind farms, there are very few publicly traded wind power companies. In the case of ethanol, high and rising corn prices have brought ethanol stocks out of favor with investors.

Solar Energy

Solar energy can be used to convert sunlight into heat, called solar thermal energy, or directly into electricity, known as photovoltaic (PV) energy. Solar thermal applications can be distributed, such as roof-mounted systems for heating swimming pools, or can be centralized where sunlight is concentrated to heat a medium that drives a turbine to generate electricity in large scale plants.

Electricity generated from solar thermal electric power plants requires large concentrators and turbines, which are not suitable for residential locations. We refer to solar power as the use of interconnected solar cells, as opposed to solar thermal technology, to generate electricity from sunlight. The interconnected cells are packaged into solar panels, which are mounted in areas with direct exposure to the sun, such as rooftops.

Solar power technology has been used to generate electricity in space program applications for several decades and in commercial applications over the last 30 years. Increasingly, government incentive programs are accelerating the adoption of solar power. Since 2001, the global market for solar power installed capacity has grown at a compound annual growth rate of approximately 40%, driven by strong growth in Germany, Spain, and the U.S.

According to SolarBuzz (a research and consulting firm), the global solar power market, as defined by solar power system installations, generated $17.2 billion in revenue in 2007 (the most recently available information), up 56% over 2006 global revenue. Such total global solar market installation revenue is expected to be within a range of $18.7 billion to $31.4 billion by 2011. On a generation output basis, 2007 global solar cell production also increased 56% year-over-year to 3,436 megawatts (MW); meanwhile, worldwide installations grew 62% to a record high of 2,826 MW. Germany is the global leader for PV installations (1,328 MW in 2007), followed by Spain (640 MW), Japan (230 MW) and the United States (220 MW).

T. Boone Pickens & the "Pickens Army"

In President Obama's Inaugural Address on January 20, 2009, T. Boone Pickens, Texas oilman, Chairman and CEO of BP Capital and Director of Clean Energy Fuels Corp. (CLNE), along with millions of Americans, heard our new President Obama pledge to transform U.S. energy policy. Mr. Pickens is committed to this goal and believes that the president's goals are bold yet achievable.

Mr. Pickens has inspired over 1 million volunteers, known as Pickens' Army, to pressure government for a change in energy policy. In addition, his role at Clean Energy Fuels is committed to convert commercial fleet vehicles to natural gas. Clean Energy Fuels Corp. (Clean Energy) is a provider of natural gas as an alternative fuel for vehicle fleets in the United States and Canada. The Company offers a solution to enable customers to run their fleets on natural gas. It designs, builds, finances and operates fueling stations, and supplies customers with compressed natural gas (CNG) and liquefied natural gas (LNG).

The Obama Administration has already begun working with Congress on a stimulus plan to create more new jobs and return to economic growth by investing heavily in renewable energy sources such as solar and wind power, rebuilding the U.S. electricity transmission grid and ultimately reducing U.S. dependence on foreign oil and ending oil.

OPPORTUNITIES

Compared to other renewable energy technologies, solar power's benefits include:

• Environmental Advantage: Solar power is one of the most benign electric generation resources. Solar cells generate electricity without air or water emissions, noise, vibration, habitat impact or waste generation.
• Fuel Risk Advantage: Unlike fossil and nuclear fuels, solar energy has no risk of fuel price volatility or delivery risk. Although there is variability in the amount and timing of sunlight over the day, season and year, a properly sized and configured system can be designed to be highly reliable while providing a long-term, fixed price electric supply.
• Location Advantage: Unlike other renewable resources such as hydroelectric and wind power, solar power is generally located at a customer site due to the universal availability of sunlight. As a result, solar power limits the expense of, and energy losses associated with, transmission and distribution from large-scale electric plants to the end users. For most residential consumers seeking an environmentally friendly power alternative, solar power is the only viable choice because it can be located in urban and suburban environments.
• Retail Rate Benchmark Advantage: Unlike biomass, geothermal, hydroelectric and wind power generation, which are location-dependent and sell primarily to the wholesale market, solar power competes with retail electric rates as it is customer-sited and supplements a customer's electricity purchased at retail rates from the utility network.
• Peak Energy Generation Advantage: Solar power is well-suited to match peak energy needs as maximum sunlight hours generally correspond to typical peak demand periods when electricity prices are at their highest. These characteristics increase the value of solar power as compared to other renewable resources that do not align with peak demand periods.
• Modularity: Solar power products can be deployed in many sizes and configurations to meet the specific needs of the customer.
• Reliability: With no moving parts or regular required maintenance, solar power systems are among the most reliable forms of electricity generation.

WEAKNESSES

• The global economic crises will temper alternative energy sales and earnings growth.
• The immediate concerns over economic weakness likely takes the short-term focus off progress toward a new energy policy.
• Continued weakness in the debt and equity markets, for as long as it lasts, will raise costs of capital for firms in this emerging sector, and may prevent project financing, working capital requirements, and new research and development. Federal funding for a new energy policy will largely dry up.
• Alternative energy stock prices generally rise and fall in direct proportion to the price of crude oil. While in times of high oil prices this may also present an opportunity, it also increases volatility in the sector.

Chicago, IL - April 28, 2009 - Zacks Research Director, Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.

Key Points from Van Dijk's Latest Earnings Assessment

• Total earnings so far down 9.4% from last year, but up sharply from Q4
• Financials much better than expected, but quality of earnings is awful
• Excluding Financials, total earnings are down 22.2% from a year ago and -12.2% from Q4
• Total net income is down in all sectors but Financials and Health Care
• Health Care, Tech and Discretionary all showing lots of positive surprises
• Full S&P 500 (SPX) total net income expected to be 25.1% lower than last year
• Revisions Ratios improve but remain deep in negative territory
• Bottom-up estimate for S&P 500 now $59.36 in 2009 versus $59.42 last week.
• S&P 500 now expected to earn $74.21 in 2010 versus $74.01 last week

Total Net Income Growth Earnings are coming in much better than expected.

This is particularly true in the financial sector. However, there the quality of earnings is exceptionally poor, with billions of dollars of earnings due to declines in the prices of their bonds. This is pure accounting nonsense. Mark-to-market is apparently ok for liabilities, but not for assets? Never mind that most bonds have covenants that require that if the issuer buys back the bond they can only do so after a certain date and at a prearranged price, which is almost always above par.

If Financials are excluded, the picture is vey different, with total net income down 22.2% from a year ago, and 12.2% lower than in the 4th quarter. The 139 (27.8%) firms that have reported, collectively earned $57.5 billion versus $63.5 billion a year ago and $28.2 billion in the fourth quarter. The 112 non-financial firms have collectively earned $41.8 billion versus $53.7 billion a year ago and $47.5 billion in the fourth quarter.

Health Care is the only other sector showing year-over-year growth in total net income, and that is just 3.1%. The weakest performances so far in terms of total net income growth have been Materials, Industrials and Consumer Discretionary.

However, with less than one-third of the S&P 500 firms reporting so far, so the results could still change significantly. Also the percentage of firms reporting is far from uniform across sectors (still no utilities reports for example).

Still, many of the earnings declines have been less than expected, and the raw number of positive surprises is leading disappointments by slightly more than 2:1. The median surprise is very healthy at 5%. Despite the better than expected earning reports, estimate cuts continue to run almost 2x the number of positive estimate revisions for 2009 and over 2:1 for 2010.

Since the first quarter is part of the full year earnings any firm that surprises positively and does not see its full year estimates raised has an implied estimate cut for the remaining quarters of the year. That being said, the current revisions ratio of 0.51 is substantially higher than it was a month ago (0.29). The 2010 revisions ratio has also improved substantially, to 0.46 from 0.27 a month ago. In other words, estimates are being cut, but at a slower pace than then were previously.

Scorecard and Median EPS Growth Rates

• Median EPS decline reported so far is 23.5%
• A 15.0% decline is seen in the first quarter for those companies yet to report
• Every sector but Health Care is down among the reported firms
• Same is true for those yet to report (Utilities at 0.0%)
• Surprise ratio at 2.08, median surprise 5.00% with 139 firms reporting
• Positive surprises concentrated in the Discretionary, Health Care and Tech Sectors

Just over 1 in 4 firms have reported their first quarter results. Of the 33 results in, positive surprises lead disappointments, but by less than the normal margin. The ratio of positive surprises to disappointments stands at 2.08:1, while in recent years it has regularly been well over 3:1. The median surprise is 5.00%, which is above historical norms. These figures will be very volatile in the early going and will most likely change significantly by the time earnings season is over.

Tech has the best overall surprise profile so far, with 18 positive surprises and just 2 disappointments. The median surprise is a very healthy 10.4%.

Health Care and Consumer Discretionary also have shown surprisingly good results. By raw count, financials have had just as many disappointments as positive surprises, but the positive surprises have come at the bigger and more significant firms (and are of extremely poor quality). Energy has also been disappointing, but it still very early for the sector with just over 10% of the results in.

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 up to 0.51, from 0.41 last week
• Revisions ratio has been trending higher, but still very weak
• Tech in positive territory mostly due to Semiconductor strength
• Industrials hardest hit with cuts outnumbering increases by almost 9:1
• Ratio of firms with rising to falling mean estimates rises to 0.40 from 0.36
• Total number of revisions (4-week total) up to 2,386 from 2,259 last week (5.6%)
• Increases up to 805 from 720 (11.8%), cuts up to 1,581 from 1,538 (2.8%)

The revisions ratio improved sharply, but remains in very negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.)

Only Telecom and Discretionary are in neutral territory. The overall pace of estimate revisions is slowing dramatically, as it usually does after earnings season is over. The revisions ratio is based on the four week moving totals of estimate changes. Thus the rise in the ratio may have more to do with old estimate cuts falling off faster than old estimate increases than it does with new estimate revisions.

Technology leads the pack this week. Within the sector, Texas Instruments (TXN) was impressive with 12 increases and no cuts, which resulted in a 20.5% increase in its mean estimate. TXN alone was responsible for 1 out of 5 estimate increases in the sector.

The weakness in the Industrial sector was wide spread, some of the more significant cuts in the sector were in Caterpillar (CAT), Ingersoll Rand (IR) and Parker Hannifin (PH).

The Materials sector was very weak overall, most of that was due to weakness in the Steel and Paper companies. However, one stock that was moving against the grain of the sector was Freeport McMoran (FCX) where the mean estimate is up more than 90% over the last month.

The Zacks Revisions Ratio: 2010

• Overall picture for 2010 similar to that of 2009
• Revisions ratio up to 0.46 from 0.42
• Discretionary, Staples, Tech the "strongest"; Industrials the weakest for 2010
• Over 9 cuts per increase in the Industrials sector; Transports and Machinery are very weak
• The ratio of rising to falling mean estimates rises to 0.47 from 0.40
• Total number of revisions rises to 1,757 from 1,622 (8.3%)
• Estimate increases rises to 577 from 480 (20.2%), cuts rise to 1,200 from 1,142 (5.1%)
• Industrials, Energy and Materials slammed

The 2010 revisions ratio story is pretty much the same as 2009: a low but improving revisions ratio. As with 2009, the total number of revisions rose, which is seasonally normal, but cuts actually fell while increases rose strongly.

The 2 Consumer Sectors and Tech have made it into neutral territory, but all others remain very weak. The Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak.

In recent weeks the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large. The Material sector tells a similar story.

Earnings Shares and P/E's

• Health Care expected to take Earnings crown from Energy in 2009, keep it in 2010
• Energy Earnings Share expected to plunge to 12.0% from 23.2%
• Financials 2009 earnings share expected to rise to 11.7% from -2.0% in 2008.
• Consumer Discretionary market cap share far above earnings shares (overvalued?)
• Health Care Market Cap share well below earnings shares (undervalued?)
• P/E's are too low since earnings estimates are too high
• Earnings Shares, including historical, based on current make up of S&P 500
• 12-month forward S&P P/E of 13.46 equates to earnings yield of 7.46%. This is very attractive relative to 10-year T-note yield of 2.93%, but only mediocre relative to 5.66% A-rated 10-year corporate.
• T-note rates are rising and more realistic earnings yields of near 5.87% based on lower earnings ($50) means the spread, while still attractive, is not overwhelming.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5186

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5186.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=5187.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.Zacks.com

Key Points:

• Total earnings so far down 9.4% from last year, but up sharply from Q4
• Financials much better than expected, but quality of earnings is awful
• Excluding Financials, total earnings are down 22.2% from a year ago and -12.2% from Q4
• Total net income is down in all sectors but Financials and Health Care
• Health Care, Tech and Discretionary all showing lots of positive surprises
• Full S&P 500 (SPX) total net income expected to be 25.1% lower than last year
• Revisions Ratios improve but remain deep in negative territory
• Bottom-up estimate for S&P 500 now $59.36 in 2009 versus $59.42 last week.
• S&P 500 now expected to earn $74.21 in 2010 versus $74.01 last week

Total Net Income Growth Earnings are coming in much better than expected.

This is particularly true in the financial sector. However, there the quality of earnings is exceptionally poor, with billions of dollars of earnings due to declines in the prices of their bonds. This is pure accounting nonsense. Mark-to-market is apparently ok for liabilities, but not for assets? Never mind that most bonds have covenants that require that if the issuer buys back the bond they can only do so after a certain date and at a prearranged price, which is almost always above par.

If Financials are excluded, the picture is vey different, with total net income down 22.2% from a year ago, and 12.2% lower than in the 4th quarter. The 139 (27.8%) firms that have reported, collectively earned $57.5 billion versus $63.5 billion a year ago and $28.2 billion in the fourth quarter. The 112 non-financial firms have collectively earned $41.8 billion versus $53.7 billion a year ago and $47.5 billion in the fourth quarter.

Health Care is the only other sector showing year-over-year growth in total net income, and that is just 3.1%. The weakest performances so far in terms of total net income growth have been Materials, Industrials and Consumer Discretionary.

However, with less than one-third of the S&P 500 firms reporting so far, so the results could still change significantly. Also the percentage of firms reporting is far from uniform across sectors (still no utilities reports for example).

Still, many of the earnings declines have been less than expected, and the raw number of positive surprises is leading disappointments by slightly more than 2:1. The median surprise is very healthy at 5%. Despite the better than expected earnings reports, estimate cuts continue to run almost 2x the number of positive estimate revisions for 2009 and over 2:1 for 2010.

Since the first quarter is part of the full year earnings any firm that surprises positively and does not see its full year estimates raised has an implied estimate cut for the remaining quarters of the year. That being said, the current revisions ratio of 0.51 is substantially higher than it was a month ago (0.29). The 2010 revisions ratio has also improved substantially, to 0.46 from 0.27 a month ago. In other words, estimates are being cut, but at a slower pace than then were previously.

Total Net Income Growth (Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 A	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-69.45%	2676.87%	61.08%	-56.71%	-24.89%	-91.89%	275.85%	91.60%
Health Care	6.64%	4.36%	3.07%	-1.02%	26.11%	9.70%	2.95%	9.64%
Cons. Stap.	-15.58%	-17.82%	-8.05%	22.63%	0.92%	-14.09%	0.45%	8.99%
Technology	17.58%	-23.77%	-22.60%	-28.52%	9.73%	13.16%	-14.88%	23.82%
Energy	40.56%	15.89%	-24.50%	-55.38%	2.41%	15.57%	-49.51%	3.53%
Telecom	-9.31%	-12.58%	-30.23%	-33.62%	46.56%	1.44%	-25.96%	10.21%
Cons. Disc.	14.17%	-36.04%	-31.31%	-39.61%	-9.33%	11.12%	-10.24%	15.67%
Industrial	3.55%	-21.83%	-35.51%	-37.58%	22.49%	2.75%	-27.02%	20.27%
Materials	-22.20%	-91.15%	-62.78%	-61.73%	22.63%	-17.28%	-53.57%	65.62%
S&P	-19.47%	-51.31%	-9.43%	-30.07%	-1.70%	-27.01%	-6.88%	24.32%

Total Net Income (Reported)
Sector	Q1 '09	Q1 '08	Q4 '08	Q4 '07
Financials	$15,704	$9,749	-$19,324	-$696
Health Care	$13,189	$12,796	$12,611	$12,085
Technology	$7,670	$9,908	$10,249	$13,445
Industrial	$6,701	$11,409	$10,358	$14,311
Cons. Stap.	$5,292	$5,755	$5,715	$6,954
Cons. Disc.	$3,362	$3,876	$3,163	$3,886
Telecom	$3,126	$4,480	$3,800	$4,347
Materials	$1,664	$4,472	$211	$2,384
Energy	$761	$1,008	$1,433	$1,237
S&P	$57,468	$63,454	$28,217	$57,952

Total Net Income Growth (Not Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-113.91%	-630.99%	13.82%	-14.88%	-7.53%	-59.53%	22.44%	25.46%
Health Care	7.47%	12.78%	-5.16%	-1.21%	13.86%	8.08%	-1.75%	11.69%
Cons. Stap.	33.07%	12.44%	-8.87%	1.01%	11.82%	29.49%	1.23%	9.18%
Telecom	-24.80%	-22.20%	-10.56%	-18.80%	-6.62%	-14.95%	-12.16%	4.94%
Industrial	9.17%	-8.06%	-15.38%	-19.45%	15.38%	10.16%	-19.26%	7.74%
Utilities	-5.72%	-0.63%	-19.09%	41.54%	10.76%	3.44%	-2.29%	9.31%
Technology	1.14%	-15.17%	-32.41%	-27.11%	12.53%	15.27%	-20.77%	17.52%
Energy	57.87%	-27.68%	-56.60%	-60.56%	8.85%	17.97%	-54.79%	36.80%
Materials	22.37%	-75.38%	-64.47%	-58.01%	-0.67%	0.43%	-62.47%	72.12%
Cons. Disc.	-69.19%	-178.49%	-92.94%	-0.05%	5.95%	-68.43%	-52.53%	361.25%
S&P	-6.55%	-67.40%	-34.08%	-26.76%	6.64%	-5.31%	-24.31%	25.48%

Total Net Income Growth (Combined)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Financials	-90.09%	-992.86%	39.84%	-38.03%	-18.21%	-107.22%	-637.08%	54.82%
Health Care	7.07%	8.51%	-1.07%	-1.12%	19.59%	11.90%	-2.14%	10.65%
Cons. Stap.	13.38%	1.54%	-8.63%	6.98%	7.20%	15.39%	-1.88%	9.12%
Utilities	-5.72%	-0.63%	-19.09%	41.54%	10.76%	2.91%	-1.78%	9.31%
Telecom	-15.97%	-16.59%	-23.15%	-28.00%	18.24%	-4.42%	-21.60%	8.00%
Technology	7.46%	-18.88%	-28.70%	-27.68%	11.38%	19.25%	-21.72%	20.15%
Industrial	0.64%	-19.77%	-29.80%	-33.21%	13.93%	0.94%	-27.57%	6.62%
Energy	55.90%	-24.80%	-54.41%	-59.42%	8.97%	20.68%	-55.31%	34.00%
Materials	2.20%	-81.98%	-63.51%	-59.92%	10.21%	-9.91%	-57.75%	68.71%
Cons. Disc.	-42.26%	-137.34%	-71.95%	-10.43%	1.73%	-56.40%	-17.79%	124.56%
S&P	-11.97%	-61.95%	-25.05%	-27.51%	3.21%	-19.22%	-12.94%	24.84%

Scorecard and Median EPS Growth Rates

• Median EPS decline reported so far is 23.5%
• A 15.0% decline is seen in the first quarter for those companies yet to report
• Every sector but Health Care is down among the reported firms
• Same is true for those yet to report (Utilities at 0.0%)
• Surprise ratio at 2.08, median surprise 5.00% with 139 firms reporting
• Positive surprises concentrated in the Discretionary, Health Care and Tech Sectors

Just over 1 in 4 firms have reported their first quarter results. Of the 33 results in, positive surprises lead disappointments, but by less than the normal margin. The ratio of positive surprises to disappointments stands at 2.08:1, while in recent years it has regularly been well over 3:1. The median surprise is 5.00%, which is above historical norms. These figures will be very volatile in the early going and will most likely change significantly by the time earnings season is over.

Tech has the best overall surprise profile so far, with 18 positive surprises and just 2 disappointments. The median surprise is a very healthy 10.4%.

Health Care and Consumer Discretionary also have shown surprisingly good results. By raw count, financials have had just as many disappointments as positive surprises, but the positive surprises have come at the bigger and more significant firms (and are of extremely poor quality). Energy has also been disappointing, but it still very early for the sector with just over 10% of the results in.

First-Quarter Scorecard (Reported)
Sector	1Q '09 (A)	2Q '09 (A)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Healthcare	7.59%	4.62%	16.12%	4.60%	11.61%	33.33%	4.21%	12	4	2
Utilities	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%	0	0	0
Cons. Disc.	-7.69%	-16.00%	-2.43%	-3.88%	8.82%	29.11%	9.73%	16	5	2
Cons. Stap.	-9.20%	-5.71%	8.88%	0.12%	8.66%	26.83%	0.00%	3	4	4
Tech	-25.67%	-47.40%	15.93%	-27.99%	9.90%	32.00%	10.39%	18	2	4
Energy	-26.47%	-56.30%	6.74%	-51.41%	-0.30%	10.26%	-20.00%	1	2	1
Telecom	-28.38%	-32.89%	1.44%	-25.96%	10.21%	11.11%	6.00%	1	0	0
Industrial	-40.85%	-26.11%	5.90%	-23.51%	11.53%	37.29%	5.79%	13	8	1
Financial	-41.18%	-50.88%	-35.55%	-26.88%	11.41%	33.33%	0.00%	13	13	1
Materials	-81.31%	-49.15%	-9.65%	-40.50%	13.75%	31.03%	6.94%	6	2	1
S&P 500	-23.53%	-23.65%	3.18%	-10.70%	10.14%	27.80%	5.00%	83	40	16

First-Quarter EPS Growth (Not Reported)
Sector	1Q '09 (E)	2Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Healthcare	3.43%	7.45%	17.07%	11.11%	11.19%
Utilities	0.00%	4.00%	9.28%	3.79%	7.30%
Cons. Stap.	-2.81%	3.73%	11.99%	10.78%	9.51%
Telecom	-9.33%	-1.22%	-5.01%	4.84%	-1.96%
Financial	-15.36%	-7.94%	11.90%	-12.20%	6.64%
Industrial	-18.12%	-12.11%	18.48%	15.20%	6.03%
Tech	-23.68%	-3.03%	18.25%	18.00%	13.07%
Cons. Disc.	-28.57%	-23.41%	12.43%	-13.35%	12.89%
Materials	-33.33%	-11.11%	8.55%	3.14%	13.88%
Energy	-52.08%	-58.42%	12.83%	22.61%	17.42%
S&P 500	-14.99%	-7.55%	13.33%	6.97%	10.76%

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 up to 0.51, from 0.41 last week
• Revisions ratio has been trending higher, but still very weak
• Tech in positive territory mostly due to Semiconductor strength
• Industrials hardest hit with cuts outnumbering increases by almost 9:1
• Ratio of firms with rising to falling mean estimates rises to 0.40 from 0.36
• Total number of revisions (4-week total) up to 2,386 from 2,259 last week (5.6%)
• Increases up to 805 from 720 (11.8%), cuts up to 1,581 from 1,538 (2.8%)

The revisions ratio improved sharply, but remains in very negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.)

Only Telecom and Discretionary are in neutral territory. The overall pace of estimate revisions is slowing dramatically, as it usually does after earnings season is over. The revisions ratio is based on the four week moving totals of estimate changes. Thus the rise in the ratio may have more to do with old estimate cuts falling off faster than old estimate increases than it does with new estimate revisions.

Technology leads the pack this week. Within the sector, Texas Instruments (TXN) was impressive with 12 increases and no cuts, which resulted in a 20.5% increase in its mean estimate. TXN alone was responsible for 1 out of 5 estimate increases in the sector.

The weakness in the Industrial sector was wide spread, some of the more significant cuts in the sector were in Caterpillar (CAT), Ingersoll Rand (IR) and Parker Hannifin (PH).

The Materials sector was very weak overall, most of that was due to weakness in the Steel and Paper companies. However, one stock that was moving against the grain of the sector was Freeport McMoran (FCX) where the mean estimate is up more than 90% over the last month.

Sector	Avg. 4wk EPS Change (FY1)	Revisions Ratio	Firms With FY1 EPS Increase	Firms With FY1 EPS Decrease
Technology	0.09%	1.31	31	36
Consumer Disc	-3.56%	1.05	31	44
Telecom	-1.03%	1.00	3	6
Consumer Staple	-1.80%	0.88	17	22
Health Care	-0.29%	0.76	23	27
Materials	-4.33%	0.37	4	19
Financial Services	-6.91%	0.35	16	62
Utilities	-1.30%	0.21	5	25
Energy	-11.56%	0.15	0	39
Industrials	-5.83%	0.11	2	49
S&P 500	-3.71%	0.51	132	329

The Zacks Revisions Ratio: 2010

• Overall picture for 2010 similar to that of 2009
• Revisions ratio up to 0.46 from 0.42
• Discretionary, Staples, Tech the "strongest"; Industrials the weakest for 2010
• Over 9 cuts per increase in the Industrials sector; Transports and Machinery are very weak
• The ratio of rising to falling mean estimates rises to 0.47 from 0.40
• Total number of revisions rises to 1,757 from 1,622 (8.3%)
• Estimate increases rises to 577 from 480 (20.2%), cuts rise to 1,200 from 1,142 (5.1%)
• Industrials, Energy and Materials slammed

The 2010 revisions ratio story is pretty much the same as 2009: a low but improving revisions ratio. As with 2009, the total number of revisions rose, which is seasonally normal, but cuts actually fell while increases rose strongly.

The 2 Consumer Sectors and Tech have made it into neutral territory, but all others remain very weak. The Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak.

In recent weeks the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large. The Material sector tells a similar story.

Sector	Avg. 4wk EPS Change (FY2)	Revisions Ratio	Firms With FY2 EPS Increase	Firms With FY2 EPS Decrease
Consumer Discr	-2.77%	1.10	39	32
Consumer Staples	0.07%	1.10	20	17
Technology	0.31%	1.05	30	36
Health Care	-0.11%	0.50	17	34
Telecom	-2.22%	0.48	1	7
Financial Services	-10.57%	0.33	17	61
Utilities	-1.98%	0.22	9	23
Energy	-10.21%	0.18	1	38
Materials	-11.80%	0.16	5	17
Industrials	-5.08%	0.11	5	44
S&P 500	-4.29%	0.46	144	309

Earnings Shares and P/E's

• Health Care expected to take Earnings crown from Energy in 2009, keep it in 2010
• Energy Earnings Share expected to plunge to 12.0% from 23.2%
• Financials 2009 earnings share expected to rise to 11.7% from -2.0% in 2008.
• Consumer Discretionary market cap share far above earnings shares (overvalued?)
• Health Care Market Cap share well below earnings shares (undervalued?)
• P/E's are too low since earnings estimates are too high
• Earnings Shares, including historical, based on current make up of S&P 500
• 12-month forward S&P P/E of 13.46 equates to earnings yield of 7.46%. This is very attractive relative to 10-year T-note yield of 2.93%, but only mediocre relative to 5.66% A-rated 10-year corporate.
• T-note rates are rising and more realistic earnings yields of near 5.87% based on lower earnings ($50) means the spread, while still attractive, is not overwhelming.

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap %	P/E 2008	P/E 2009	P/E 2010
Technology	17.22%	15.56%	14.95%	18.80%	13.6	17.3	14.4
Health Care	16.85%	18.94%	16.76%	13.63%	10.1	10.3	9.3
Cons Staple	13.20%	14.99%	13.08%	13.37%	12.7	12.8	11.7
Energy	23.15%	12.03%	13.03%	12.04%	6.5	14.4	10.6
Financials	-2.04%	11.74%	14.54%	11.55%	NM	14.1	9.1
Industrials	13.55%	11.71%	9.98%	10.18%	9.4	12.5	11.7
Cons Disc.	4.54%	3.96%	7.12%	9.72%	26.8	35.2	15.7
Utilities	4.63%	5.23%	4.57%	3.86%	10.4	10.6	9.7
Telecom	4.47%	3.95%	3.41%	3.70%	10.3	13.4	12.4
Materials	4.44%	1.89%	2.56%	3.15%	8.9	23.9	14.2
S&P 500	100.00%	100.00%	100.00%	100.00%	12.5	14.4	11.5

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Thursday 4/22/2009

Zacks Investment Research

Chicago, IL - April 14, 2009 - Zacks Research Director, Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.

Key Points from Van Dijk's Latest Earnings Assessment

• Alcoa, Inc. (AA) blows the seasonal kickoff
• Big bank improvements for quarter have not yet translated to full-year expectations
• Early first-quarter results not encouraging with total net income down 23.5%
• Full S&P 500 (SPX) total net income expected to be 28.7% lower than last year
• Forecasts had called for a 37.2% decline last week; the difference is that the Financials' decline was cut to 9.0% from -27.2% last week
• Total net income expected to fall 12.2% for all of 2009, after 18.9% fall in 2008
• Estimate cuts still outnumber increases by more than 3:1 for both years
• Bottom up estimate for S&P 500 now $59.58 in 2009 versus $60.39 last week.
• S&P 500 now expected to earn $74.21 in 2010 versus $74.82 last week

Total Net Income Growth

We are off and running on the first-quarter earnings season with the traditional kick-off by Alcoa, Inc. (AA), which incurred a penalty by kicking it out of bounds with a loss of $470 million.

While we are still very early in the season, with just 27 or 5.4% of all firms reporting, the start has been rocky. Total net income is off 23.5% from a year ago versus an 11.4% drop last quarter. Granted this is far from a representative sample, but it does not seem to be a good omen.

The big upward surge we saw in the financials expectations for the quarter backed off a bit, but will probably resume given Thursday's announcement from Wells Fargo (WFC). (Revisions related to the announcement are reflected in the data). Excluding provisions for bad existing loans, the banks should be very profitable given the steep yield curve and the refinance boom. However, provisions are a mighty big exclusion. The shirt in mark-to-market rules though may give banks cover to avoid adequate provisioning. The pass through of the American International Group (AIG) bailout funds will also greatly help on that front as well.

Looking at the total picture of both companies that have reported and expectations for those that have not shows expectations for total net income being down 28.7% from a year ago. That is a big improvement from the 62.0% decline in the fourth-quarter, but is hardly good news.

A very big part of the fourth-quarter decline was drive by exceptionally large losses at a handful of financial firms, most notably Citigroup (C) and AIG. It seems unlikely that AIG will post anything like the loss it saw in the fourth quarter.

For most stocks the year-over-year decline in net income is likely to be steeper in the first quarter than it was in the fourth quarter. Seven of the 10 sectors are expected to post a bigger drop this quarter. The exceptions are Financials, Materials and Consumer Discretionary. All 3 were absolute disasters in the fourth quarter, and for Materials and Discretionary this will be a very ugly quarter, but just slightly better than the fourth quarter.

Looking at full-year projections, total net income is expected to fall 12.2% following an 18.9% decline in 2008. Most sectors are expected to post far worse results for the year than last year, with the cyclical areas expected to be hit the hardest, particularly the commodity sensitive Materials and Energy sectors. Keep in mind though that those firms were printing money early in 2008.

Scorecard and Median EPS Growth Rates

• Early first-quarter results are weak with median EPS down 5.9%
• Surprise ratio at 1.55 with a median surprise 2.9% (27 firms reporting)
• Positive surprises concentrated in the Consumer Discretionary Sector. (In early going surprise ratio and median will be very volatile)
• A 17.2% decline is seen in the first quarter
• Every sector but Health Care and Utilities (unchanged) expected to be down
• Second quarter to be only slightly better, down 9.0%
• Implied second half rebound, full year 2009 expected to be up 6.7%

Only 27 firms have reported their first quarter results. The ratio of positive surprises to disappointments stands at 1.55:1, while in recent years it has regularly been well over 3:1. The median surprise is 2.87%, which is closer to historical norms. These figures will be very volatile in the early going and may change significantly by the time earnings season is over.

The positive surprises have been concentrated in the Discretionary sector, and it is the only sector to show positive year-over-year growth in median EPS. The rest of the sector is not expected to fare as well, with a median EPS decline of 28.6% expected. Then again low expectations make it easier to have a positive surprise.

Excluding that sector disappointments are beating positive surprises by almost 2:1. These are mostly still firms with February fiscal ends, and are not a very representative sample.

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 down to 0.32, from 0.31 last week
• All sectors but Telecom in negative territory
• Consumer Discretionary is getting less negative
• Industrials is the hardest hit with cuts outnumbering increases by more than 20:1
• Ratio of firms with rising to falling mean estimates at 0.33, up from 0.26
• Total number of revisions (4-week total) up to 1,980 from 1,907 last week (3.8%)
• Increases down to 480 from 448 (7.0%), cuts up to 1,500 from 1,459 (2.8%)
• Estimate activity at seasonal low and will climb sharply in coming weeks

The revisions ratio reversed a gradual uptrend it had been in for several weeks, and remains in very negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.) Only health Care has made into neutral territory.

The Telecom sector was the only one with more increases than cuts, but the sample size is so small (16 total) that it really is not that significant. The Consumer Discretionary sector has improved significantly, most likely in response to the better than expected earnings for the early reporters in the sector.

The dramatic improvement in the total net income expectations for the Financial sector in the first quarter has not been matched to a flood of estimate increases for the full year. This should make you suspicious of how real the improvement really is. Full-year cuts outnumber increases for the sector by almost 4:1.

The Industrial sector is an absolute mess, with cuts out pacing increases by a margin of over 20:1. Within the sector, Transportation and Capital Goods companies are particularly hard hit.

The Zacks Revisions Ratio: 2010

• Overall picture for 2010 similar to that of 2009
• Revisions ratio up to 0.30 from 0.27
• More than 3 cuts per increase for 6 sectors and more than 5 cuts per increase in 3 sectors
• Telecom and Discretionary the "strongest"; Industrials and Energy the weakest for 2010
• Ratio of rising to falling mean estimates rises to 0.31 from 0.29
• Total number of revisions rises to 1,381 from 1,285 (7.5%)
• Estimate increases rises to 321 from 277 (15.9%), cuts rise to 1,060 from 1,008 (5.2%)
• Industrials, Energy and Materials slammed

The 2010 revisions ratio story is pretty much the same as 2009. A gradual pattern of a low but improving revisions ratio was slightly reversed this week. In a bit of a surprise, the total number of revisions actually grew this week, counter the normal seasonal pattern.

The very small Telecom sector (15 total revisions) is the best on a relative basis, but nothing to really write home about. The Consumer Discretionary sector has also improved significantly in recent weeks, as has the Consumer Staples sector. The Health Care sector has been fading.

As with 2009, the Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak. However, in recent weeks the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large.

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• Earnings Shares, including historical, based on current make up of S&P 500
• Health Care expected to take earnings crown from Energy in 2009, keep it in 2010
• Energy's earnings share is expected to plunge to 12.8% from 23.8%
• Financials' 2009 earnings share expected to rise to 12.1% from -2.1% in 2008.
• Consumer Discretionary's market cap share far above earnings shares (overvalued?)
• Health Care's market cap share is well below earnings shares (undervalued?)
• 12-month forward S&P P/E of 13.1 equates to earnings yield of 7.73% and is very attractive relative to 10 year T-note yield of 2.85%, but only mediocre relative to 5.63% A rated 10 year corporate.
• T-note rates are rising and more realistic earnings yields of near 6.06% based on lower earnings ($50) means the spread, while still attractive is not overwhelming.

Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: http://at.zacks.com/?id=5185

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5186

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5186. 

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms.  It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time.  Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=5187.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.Zacks.com

Zacks Investment Research
]]> http://www.straightstocks.com/stock-watch/earnings-trends-highlights-alcoa-inc-wells-fargo-citigroup-and-american-international-group-press-releases/feed/ 0 http://www.straightstocks.com/stock-watch/earnings-season-off-to-a-weak-start-earnings-trends/ http://www.straightstocks.com/stock-watch/earnings-season-off-to-a-weak-start-earnings-trends/#comments Mon, 13 Apr 2009 05:00:00 +0000 Dirk Van Dijk http://www.zacks.com/commentary/10581/Earnings+Season+Off+To+A+Weak+Start+-+Earnings+Trends Highlighted stocks include Alcoa, Inc. (AA), Wells Fargo (WFC), Citigroup (C) and American International Group (AIG).

Key Points:

• Alcoa, Inc. (AA) blows the seasonal kickoff
• Big bank improvements for quarter have not yet translated to full-year expectations
• Early first-quarter results not encouraging with total net income down 23.5%
• Full S&P 500 (SPX) total net income expected to be 28.7% lower than last year
• Forecasts had called for a 37.2% decline last week; the difference is that the Financials' decline was cut to 9.0% from -27.2% last week
• Total net income expected to fall 12.2% for all of 2009, after 18.9% fall in 2008
• Estimate cuts still outnumber increases by more than 3:1 for both years
• Bottom up estimate for S&P 500 now $59.58 in 2009 versus $60.39 last week.
• S&P 500 now expected to earn $74.21 in 2010 versus $74.82 last week

Total Net Income Growth

We are off and running on the first-quarter earnings season with the traditional kick-off by Alcoa, Inc. (AA), which incurred a penalty by kicking it out of bounds with a loss of $470 million.

While we are still very early in the season, with just 27 or 5.4% of all firms reporting, the start has been rocky. Total net income is off 23.5% from a year ago versus an 11.4% drop last quarter. Granted this is far from a representative sample, but it does not seem to be a good omen.

The big upward surge we saw in the financials expectations for the quarter backed off a bit, but will probably resume given Thursday's announcement from Wells Fargo (WFC). (Revisions related to the announcement are reflected in the data). Excluding provisions for bad existing loans, the banks should be very profitable given the steep yield curve and the refinance boom. However, provisions are a mighty big exclusion. The shirt in mark-to-market rules though may give banks cover to avoid adequate provisioning. The pass through of the American International Group (AIG) bailout funds will also greatly help on that front as well.

Looking at the total picture of both companies that have reported and expectations for those that have not shows expectations for total net income being down 28.7% from a year ago. That is a big improvement from the 62.0% decline in the fourth-quarter, but is hardly good news.

A very big part of the fourth-quarter decline was drive by exceptionally large losses at a handful of financial firms, most notably Citigroup (C) and AIG. It seems unlikely that AIG will post anything like the loss it saw in the fourth quarter.

For most stocks the year-over-year decline in net income is likely to be steeper in the first quarter than it was in the fourth quarter. Seven of the 10 sectors are expected to post a bigger drop this quarter. The exceptions are Financials, Materials and Consumer Discretionary. All 3 were absolute disasters in the fourth quarter, and for Materials and Discretionary this will be a very ugly quarter, but just slightly better than the fourth quarter.

Looking at full-year projections, total net income is expected to fall 12.2% following an 18.9% decline in 2008. Most sectors are expected to post far worse results for the year than last year, with the cyclical areas expected to be hit the hardest, particularly the commodity sensitive Materials and Energy sectors. Keep in mind though that those firms were printing money early in 2008.

Total Net Income Growth (Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 A	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Cons. Disc.	42.00%	1.04%	18.24%	-2.83%	-21.37%	13.43%	-4.87%	15.97%
Technology	26.50%	-8.36%	-17.13%	-27.91%	6.68%	26.35%	-18.14%	28.78%
Cons. Stap.	4.86%	0.30%	-18.72%	-6.90%	12.60%	16.04%	-8.92%	8.35%
Materials	-38.66%	-41.65%	-46.76%	-56.16%	4.71%	-6.96%	-44.42%	87.28%
Industrial	-19.55%	0.53%	-64.45%	-55.45%	12.04%	-15.20%	-29.63%	-4.28%
Financials	-10.97%	-146.87%	-173.95%	-136.52%	-22.57%	-37.02%	-182.65%	-86.62%
S&P	14.79%	-11.37%	-23.53%	-29.89%	-1.36%	9.67%	-20.32%	24.92%

Total Net Income (Reported)
Sector	Q1 '09	Q1 '08	Q4 '08	Q4 '07
Cons. Disc.	$1,903	$1,609	$1,006	$996
Technology	$1,462	$1,765	$1,710	$1,866
Cons. Stap.	$1,431	$1,761	$1,602	$1,597
Materials	$725	$1,361	$325	$557
Industrial	$169	$475	$565	$562
Financials	-$177	$239	-$91	$195
S&P	$5,514	$7,210	$5,117	$5,774

Total Net Income Growth (Not Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Cons. Stap.	14.03%	1.65%	0.01%	7.99%	6.78%	15.33%	1.10%	6.71%
Health Care	7.07%	8.51%	-2.91%	1.01%	19.65%	11.85%	-2.10%	10.93%
Financials	-90.47%	-1019.60%	-9.30%	-26.95%	-18.21%	-107.59%	-630.77%	53.57%
Utilities	-5.72%	-0.63%	-19.24%	41.79%	10.76%	2.91%	-1.34%	10.06%
Industrial	1.17%	-20.26%	-20.34%	-28.29%	13.99%	1.41%	-25.49%	7.00%
Telecom	-15.97%	-16.59%	-24.60%	-26.49%	18.24%	-4.42%	-21.37%	8.17%
Technology	6.32%	-19.55%	-31.24%	-24.78%	11.75%	18.72%	-23.25%	20.42%
Energy	57.26%	-26.09%	-54.92%	-58.67%	8.57%	21.71%	-54.24%	34.28%
Materials	5.32%	-86.36%	-61.69%	-59.79%	11.13%	-10.38%	-55.88%	55.28%
Cons. Disc,	-52.91%	-147.11%	-79.16%	-4.47%	4.93%	-63.63%	-23.27%	167.58%
S&P	-12.34%	-63.75%	-28.90%	-24.62%	3.33%	-19.86%	-11.87%	24.63%

Total Net Income Growth (Combined)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Cons. Stap.	13.38%	1.53%	-1.61%	6.88%	7.20%	15.38%	0.32%	6.82%
Health Care	7.07%	8.51%	-2.91%	1.01%	19.65%	11.85%	-2.10%	10.93%
Financials	-90.09%	-992.86%	-11.52%	-27.90%	-18.23%	-107.22%	-651.07%	54.52%
Utilities	-5.72%	-0.63%	-19.24%	41.79%	10.76%	2.91%	-1.34%	10.06%
Industrial	0.64%	-19.77%	-21.36%	-28.91%	13.93%	0.94%	-25.59%	6.75%
Telecom	-15.97%	-16.59%	-24.60%	-26.49%	18.24%	-4.42%	-21.37%	8.17%
Technology	7.46%	-18.88%	-30.29%	-25.07%	11.38%	19.25%	-22.87%	21.08%
Energy	57.26%	-26.09%	-54.92%	-58.67%	8.57%	21.71%	-54.24%	34.28%
Materials	2.20%	-81.98%	-59.11%	-59.19%	10.21%	-9.91%	-54.27%	60.74%
Cons. Disc,	-42.26%	-137.34%	-68.50%	-4.21%	1.74%	-56.40%	-18.78%	124.23%
S&P	-11.56%	-62.00%	-28.69%	-24.82%	3.17%	-18.92%	-12.23%	24.64%

Scorecard and Median EPS Growth Rates

• Early first-quarter results are weak with median EPS down 5.9%
• Surprise ratio at 1.55 with a median surprise 2.9% (27 firms reporting)
• Positive surprises concentrated in the Consumer Discretionary Sector. (In early going surprise ratio and median will be very volatile)
• A 17.2% decline is seen in the first quarter
• Every sector but Health Care and Utilities (unchanged) expected to be down
• Second quarter to be only slightly better, down 9.0%
• Implied second half rebound, full year 2009 expected to be up 6.7%

Only 27 firms have reported their first quarter results. The ratio of positive surprises to disappointments stands at 1.55:1, while in recent years it has regularly been well over 3:1. The median surprise is 2.87%, which is closer to historical norms. These figures will be very volatile in the early going and may change significantly by the time earnings season is over.

The positive surprises have been concentrated in the Discretionary sector, and it is the only sector to show positive year-over-year growth in median EPS. The rest of the sector is not expected to fare as well, with a median EPS decline of 28.6% expected. Then again low expectations make it easier to have a positive surprise.

Excluding that sector disappointments are beating positive surprises by almost 2:1. These are mostly still firms with February fiscal ends, and are not a very representative sample.

First-Quarter Scorecard (Reported)
Sector	1Q '09 (A)	2Q '09 (A)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Cons. Disc.	15.78%	11.71%	-0.29%	2.33%	7.35%	12.66%	18.98%	9	0	1
Tech	-11.54%	-51.92%	18.31%	-46.25%	1.70%	8.00%	4.84%	3	1	2
Cons. Stap.	-17.44%	-1.73%	10.67%	4.85%	7.44%	14.63%	-5.66%	1	4	1
Industrial	-43.36%	-39.66%	-5.25%	-23.74%	-1.35%	3.39%	-18.06%	0	2	0
Materials	-106.90%	-58.91%	12.70%	-66.94%	-88.11%	6.90%	-2.20%	1	1	0
Financial	-172.00%	-130.90%	-37.71%	-183.50%	-86.63%	1.23%	-227.20%	0	1	0
S&P 500	-5.85%	-6.82%	7.43%	-3.99%	6.77%	5.40%	2.87%	14	9	4

First-Quarter EPS Growth (Not Reported)
Sector	1Q '09 (E)	2Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Healthcare	4.55%	7.60%	18.31%	13.56%	11.15%
Utilities	0.00%	3.23%	9.28%	3.79%	8.00%
Cons. Stap.	-1.82%	3.62%	12.56%	9.00%	9.56%
Telecom	-11.76%	-2.12%	-2.94%	3.03%	0.44%
Industrial	-21.11%	-15.56%	16.57%	13.88%	9.15%
Cons. Disc.	-28.57%	-22.22%	11.81%	-12.64%	12.74%
Financial	-29.10%	-11.19%	9.08%	-21.20%	9.65%
Tech	-29.51%	-19.05%	15.59%	17.87%	12.95%
Materials	-41.32%	-19.27%	13.56%	-4.76%	14.52%
Energy	-49.26%	-57.89%	11.75%	21.40%	13.23%
S&P 500	-17.23%	-8.97%	13.31%	6.69%	10.96%

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 down to 0.32, from 0.31 last week
• All sectors but Telecom in negative territory
• Consumer Discretionary is getting less negative
• Industrials is the hardest hit with cuts outnumbering increases by more than 20:1
• Ratio of firms with rising to falling mean estimates at 0.33, up from 0.26
• Total number of revisions (4-week total) up to 1,980 from 1,907 last week (3.8%)
• Increases down to 480 from 448 (7.0%), cuts up to 1,500 from 1,459 (2.8%)
• Estimate activity at seasonal low and will climb sharply in coming weeks

The revisions ratio reversed a gradual uptrend it had been in for several weeks, and remains in very negative territory. (Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive.) Only health Care has made into neutral territory.

The Telecom sector was the only one with more increases than cuts, but the sample size is so small (16 total) that it really is not that significant. The Consumer Discretionary sector has improved significantly, most likely in response to the better than expected earnings for the early reporters in the sector.

The dramatic improvement in the total net income expectations for the Financial sector in the first quarter has not been matched to a flood of estimate increases for the full year. This should make you suspicious of how real the improvement really is. Full-year cuts outnumber increases for the sector by almost 4:1.

The Industrial sector is an absolute mess, with cuts out pacing increases by a margin of over 20:1. Within the sector, Transportation and Capital Goods companies are particularly hard hit.

Sector	Avg. 4wk EPS Change (FY1)	Revisions Ratio	Firms With FY1 EPS Increase	Firms With FY1 EPS Decrease
Telecom	-0.91%	1.00	2	7
Consumer Disc	-4.32%	0.65	22	47
Technology	-3.04%	0.60	24	45
Consumer Staple	-1.59%	0.49	13	24
Health Care	-0.28%	0.37	19	31
Utilities	-1.68%	0.28	9	23
Financial Services	-5.55%	0.26	16	64
Materials	-9.32%	0.23	5	20
Energy	-8.95%	0.18	0	39
Industrials	-6.69%	0.05	5	50
S&P 500	-4.29%	0.32	115	350

The Zacks Revisions Ratio: 2010

• Overall picture for 2010 similar to that of 2009
• Revisions ratio up to 0.30 from 0.27
• More than 3 cuts per increase for 6 sectors and more than 5 cuts per increase in 3 sectors
• Telecom and Discretionary the "strongest"; Industrials and Energy the weakest for 2010
• Ratio of rising to falling mean estimates rises to 0.31 from 0.29
• Total number of revisions rises to 1,381 from 1,285 (7.5%)
• Estimate increases rises to 321 from 277 (15.9%), cuts rise to 1,060 from 1,008 (5.2%)
• Industrials, Energy and Materials slammed

The 2010 revisions ratio story is pretty much the same as 2009. A gradual pattern of a low but improving revisions ratio was slightly reversed this week. In a bit of a surprise, the total number of revisions actually grew this week, counter the normal seasonal pattern.

The very small Telecom sector (15 total revisions) is the best on a relative basis, but nothing to really write home about. The Consumer Discretionary sector has also improved significantly in recent weeks, as has the Consumer Staples sector. The Health Care sector has been fading.

As with 2009, the Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak. However, in recent weeks the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large.

Sector	Avg. 4wk EPS Change (FY2)	Revisions Ratio	Firms With FY2 EPS Increase	Firms With FY2 EPS Decrease
Telecom	-1.46%	0.88	2	7
Consumer Staples	0.09%	0.73	17	22
Consumer Discr	-3.95%	0.65	20	46
Technology	-1.23%	0.54	21	48
Utilities	-3.35%	0.45	7	19
Health Care	-0.56%	0.42	18	31
Financial Services	-5.98%	0.22	11	66
Materials	-9.42%	0.18	3	20
Energy	-12.72%	0.12	1	38
Industrials	-3.58%	0.02	7	44
S&P 500	-4.04%	0.30	107	341

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• Earnings Shares, including historical, based on current make up of S&P 500
• Health Care expected to take earnings crown from Energy in 2009, keep it in 2010
• Energy's earnings share is expected to plunge to 12.8% from 23.8%
• Financials' 2009 earnings share expected to rise to 12.1% from -2.1% in 2008.
• Consumer Discretionary's market cap share far above earnings shares (overvalued?)
• Health Care's market cap share is well below earnings shares (undervalued?)
• 12-month forward S&P P/E of 13.1 equates to earnings yield of 7.73% and is very attractive relative to 10 year T-note yield of 2.85%, but only mediocre relative to 5.63% A rated 10 year corporate.
• T-note rates are rising and more realistic earnings yields of near 6.06% based on lower earnings ($50) means the spread, while still attractive is not overwhelming.

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap %	P/E 2008	P/E 2009	P/E 2010
Technology	17.39%	15.12%	14.69%	18.65%	13.0	17.1	14.1
Health Care	16.74%	18.69%	16.64%	14.13%	10.3	10.5	9.4
Cons Staple	13.21%	15.12%	12.96%	13.90%	12.8	12.7	11.9
Energy	23.65%	12.34%	13.30%	12.60%	6.5	14.1	10.5
Financials	-2.05%	11.89%	14.73%	10.65%	nm	12.4	8.0
Industrials	13.98%	11.86%	10.16%	9.70%	8.4	11.3	10.6
Cons Disc.	4.17%	3.86%	6.95%	9.41%	27.4	33.8	15.1
Utilities	4.61%	5.18%	4.58%	4.07%	10.7	10.9	9.9
Telecom	4.43%	3.91%	3.39%	3.79%	10.4	13.4	12.4
Materials	3.88%	2.02%	2.61%	3.08%	9.7	21.1	13.1
S&P 500	100.00%	100.00%	100.00%	100.00%	12.2	13.9	11.1

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Thursday 4/8/2009

Zacks Investment Research

Chicago, IL - March 31, 2009 - Zacks Research Director, Dirk Van Dijk says that S&P 500 earnings are continuing to show red ink. He tracks companies on the Zacks.com web site, naming names, while forecasting trends for the months ahead.

Key Points from Van Dijk's Latest Earnings Assessment

Key Points:

• Very early first-quarter are results not encouraging with total net income down 6.8%
• After all reports are in, total net could fall 37.2%
• Revisions ratio falls back again as total estimate activity slows
• 2009 expectations down 3.7% over the last month; 2010 projections are down 4.0%
• Total net income expected to fall 10.9% for all of 2009, after 19.0% fall in 2008
• Bottom up estimate for S&P 500 now $60.44 in 2009, down from $62.74 a month ago, I think we will be lucky if it is over $50.
• S&P 500 now expected to earn $75.24 in 2010, down from $78.34 last month.

Total Net Income Growth

As total earnings estimate activity wanes due to the end of the earnings season, and old estimates drop off our 4-week moving totals, the revisions ratios have started to rebound, and with them the number of huge mean estimate declines. However, make no mistake, the direction of estimates is still down, just at a some what slower pace.

Looking ahead to the first quarter, every sector is expected to see a decline in total net income relative to the first quarter of 2008. For 8 of the sectors, the year over year declines are expected to be worse than the fourth quarter.

All told, a 35.3% year over year decline is currently expected. The only exceptions are the Financial and Materials sectors. While the Financials may break back into the black this quarter, and a year ago was not exactly a boom time for the sector, I suspect that they will do much worse than the 26.2% decline forecast. As for the Materials, its hard to get to excited about a 80.1% decline in earnings, even if that is not as bad as an 80.2% decline.

The early read on the second quarter is downbeat, with a 31.0% year over year decline expected. Consumer Staples are expected to post a slight gain in total net income, and the Health Care and Utilities sectors are expected to have only minor declines. Easy year ago comps will help keep the decline in the Consumer Discretionary sector to "just 19.2%". All other sectors are expected to see drops of more than 25%.

Looking at the full year data, the Financial sector is expected to return to profitability. Even though both the 2008 and 2009 numbers show negatives of over 100%, they mean very different things. In 2008 the sector went to a negative from a positive, and in 2009 the sector is expected to go to a positive from a negative. Mathematically it does not make any difference which direction you head through zero, but economically it sure does.

Mostly as a result of the expected rebound in the Financials (let us prey that there are no more massive losses like Citigroup (C) and American International Group, Inc. (AIG) posted in 2008) the total net income for the S&P 500 is only expected to fall 10.9% in 2009, after a 19.0% decline in 2008. Just because the entire sector is expected to not lose money in aggragate, it does not mean that they are going to be in good shape.

Aside from the special case of the Financials, this is shaping up to be a very bad year for earnings. For 8 of the 10 sectors, things are expected to be significantly worse in 2009 than in 2008. Or as is the case with 5 of the sectors, they saw earnings grow in 2008 and are now expected to see them decline in 2009.

Scorecard and Median EPS Growth Rates

• Early first-quarter results weak with median EPS down 9.2%
• Surprise ratio at 1.00, median surprise 0.00% with 11 firms reporting
• A 20.3% decline is seen in the first quarter
• Every sector but Health Care is expected to be down
• Second quarter to be only slightly better, down 13.9%
• Implied second-half rebound with full year 2009 expected to be up 6.7%

Only a handful of firms have reported their first quarter results. These are all companies with fiscal periods ending in February, and are hardly a representative sample.

However, from it early results it looks like we might be in for another tough quarter. Normally positive earnings surprises far exceed earnings disappointments, but so far they are equal. Median results can jump around quite a bit in the early going, so these are just very tentative clues as to the direction of the quarter. In some ways it is likely to get even worse than the current numbers show.

While the 11 that have already reported are showing a median EPS decline of 9.2%, the remaining 489 firms are expected to post a drop of 20.0%. The only sector that is expected to post positive EPS growth is Health Care. Utilities, Staples and Telecom are expected to hold up pretty well with low- to mid-single digit declines. Every other sector is expected to see a decline of well over 20%.

As things stand now, the expectations for the second quarter show a little bit of improvement, with year-over-year declines of "just" 13.9%. While the expectations for the third and fourth quarters are not shown (and the sample of direct estimates for those quarters is very thin in any case), we can infer a very dramatic rebound in median EPS growth in the second half.

For the full year the median EPS growth rate is expected to be a positive 6.7%. I find that to be extremely optimistic.

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 down to 0.29, from 0.30 last week
• All sectors back in negative territory
• 8 sectors have at least 2 cuts for every increase; 6 have at least 4 cuts per increase
• Ratio of firms with rising to falling mean estimates at 0.25, up from 0.23
• Total number of revisions (4-week total) down to 2,060 from 2,191 last week (-6.0%)
• Increases down to 465 from 511 (-9.0%), cuts down to 1,595 from 1,680 (-5.1%)
• Estimate activity nearing seasonal low

The revisions ratio reversed a gradual uptrend it had been in for several weeks, and remains in very negative territory. Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive. Only health Care has made into neutral territory.

The overall pace of estimate revisions is slowing dramatically, as it usually does after earnings season is over. Since the revisions ratio is based on the 4-week moving totals of estimate changes, the rise in the ratio may have more to do with old estimate cuts falling off than it does with new estimate revisions.

The revisions picture, while still quite negative, has improved significantly in recent weeks for the Technology sector. Telecom is also relatively strong, but that is based on a small sample size of estimate revisions. On the downside, the Industrials sector is looking particularly weak with over 17 cuts for every increase. That is far worse than even the perpetual estimate revision cellar dweller, the Financials, where cuts outnumber increases by less than 5:1.

Keep in mind, that after an earnings season is over, the total number of revisions always falls. The revisions ratios are based on 4-week moving totals of estimate revisions. Thus when the total number of revisions is falling, changes in the revisions ratios are affected more by old estimate changes falling out of the totals as by new estimate changes being made.

The Zacks Revisions Ratio: 2010

• Sample size of 2010 revisions is thin, but starting off weak
• Revisions ratio rises to 0.27 from 0.26 last week
• More than 3 cuts per increase for 6 sectors, more than 2 per increase in 9 sectors
• Telecom, Health Care the "strongest"; Industrials, Financials weakest for 2010
• Ratio of rising to falling mean estimates rises to 0.28 from 0.24
• Total number of revisions rises to 1,326 from 1,299 (2.0%)
• Estimate increases rise to 283 from 267 (-6.0%), cuts rise to 1,043 from 914 (14.1%)

The 2010 revisions ratio story is pretty much the same as 2009. A gradual pattern of a low but improving revisions ratio was slightly reversed this week. In a bit of a surprise, the total number of revisions actually grew this week, counter the normal seasonal pattern.

The very small Telecom sector (23 total revisions) and Health Care the best on a relative basis, but nothing to really write home about. The Consumer Discretionary sector has also improved significantly in recent weeks, but still faces more than two cuts for each increase. As with 2009, the Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak. However, in recent days the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large.

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• Earnings shares, including historical, based on current make up of S&P 500
• Health Care expected to take earnings crown from Energy in 2009 and keep it in 2010
• Energy's earnings share expected to plunge to 12.8% from 23.8%
• Financials' 2009 earnings share expected to rise to 12.1% from -2.1% in 2008.
• Consumer Discretionary market cap share is far above earnings shares (overvalued?)
• Health Care's market cap share is well below earnings shares (undervalued?)
• 12-month forward S&P P/E of 13.1 equates to earnings yield of 7.63% and is very attractive relative to 10-year T-note yield of 2.63%. It is only mediocre relative to 5.68% A-rated 10-year corporate.
• T-note rates are rising and more realistic earnings yields of near 6.15% based on lower earnings ($50) means the spread, while still attractive is not overwhelming.

Want stock picks from Zacks Equity Research that are based on earnings estimates? Subscribe to the free "Profit from the Pros" newsletter: http://at.zacks.com/?id=5185

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: http://at.zacks.com/?id=5186

About the Zacks Rank

Since 1988, the Zacks Rank has proven that "Earnings estimate revisions are the most powerful force impacting stock prices." Since inception in 1988, #1 Rank Stocks have generated an average annual return of +28%. During the 2000-2002 bear market, Zacks #1 Rank stocks gained +43.8%, while the S&P 500 tumbled -37.6%. Also note that the Zacks Rank system has just as many Strong Sell recommendations (Rank #5) as Strong Buy recommendations (Rank #1). Since 1988, Zacks Rank #5 stocks have underperformed the S&P 500 by 82% annually (+2% versus +10%). Thus, the Zacks Rank system allows investors to truly manage portfolio trading effectively.

Zacks "Profit from the Pros" e-mail newsletter offers continuous coverage of the industries and the stocks poised to outperform the market. Subscribe to this free newsletter today by visiting http://at.zacks.com/?id=5186.

About Zacks

Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Len Zacks. The company continually processes stock reports issued by 3,000 analysts from 150 brokerage firms. It monitors more than 200,000 earnings estimates, looking for changes.

Then, when changes are discovered, they're applied to help assign more than 4,400 stocks into five Zacks Rank categories: #1 Strong Buy, #2 Buy, #3 Hold, #4 Sell, and #5 Strong Sell. This proprietary stock-picking system continues to outperform the market by a nearly 3-to-1 margin.

The best way to unlock profitable Zacks' stock recommendations and market insights is through the free daily email newsletter: "Profit from the Pros." It provides a steady flow of profitable ideas GUARANTEED to be worth your time. Register for your free subscription to Profit from the Pros by going to http://at.zacks.com/?id=5187.

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Visit http://www.zacks.com/performance for information about the performance numbers displayed in this press release.

Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.

Contact: Dirk Van Dijk, CFA
Company: Zacks.com
Phone: 312-265-9211
Email: pr@zacks.com
Visit: www.Zacks.com

Key Points:

• Very early first-quarter are results not encouraging with total net income down 6.8%
• After all reports are in, total net could fall 37.2%
• Revisions ratio falls back again as total estimate activity slows
• 2009 expectations down 3.7% over the last month; 2010 projections are down 4.0%
• Total net income expected to fall 10.9% for all of 2009, after 19.0% fall in 2008
• Bottom up estimate for S&P 500 now $60.44 in 2009, down from $62.74 a month ago, I think we will be lucky if it is over $50.
• S&P 500 now expected to earn $75.24 in 2010, down from $78.34 last month.

Total Net Income Growth

As total earnings estimate activity wanes due to the end of the earnings season, and old estimates drop off our 4-week moving totals, the revisions ratios have started to rebound, and with them the number of huge mean estimate declines. However, make no mistake, the direction of estimates is still down, just at a some what slower pace.

Looking ahead to the first quarter, every sector is expected to see a decline in total net income relative to the first quarter of 2008. For 8 of the sectors, the year over year declines are expected to be worse than the fourth quarter.

All told, a 35.3% year over year decline is currently expected. The only exceptions are the Financial and Materials sectors. While the Financials may break back into the black this quarter, and a year ago was not exactly a boom time for the sector, I suspect that they will do much worse than the 26.2% decline forecast. As for the Materials, its hard to get to excited about a 80.1% decline in earnings, even if that is not as bad as an 80.2% decline.

The early read on the second quarter is downbeat, with a 31.0% year over year decline expected. Consumer Staples are expected to post a slight gain in total net income, and the Health Care and Utilities sectors are expected to have only minor declines. Easy year ago comps will help keep the decline in the Consumer Discretionary sector to "just 19.2%". All other sectors are expected to see drops of more than 25%.

Looking at the full year data, the Financial sector is expected to return to profitability. Even though both the 2008 and 2009 numbers show negatives of over 100%, they mean very different things. In 2008 the sector went to a negative from a positive, and in 2009 the sector is expected to go to a positive from a negative. Mathematically it does not make any difference which direction you head through zero, but economically it sure does.

Mostly as a result of the expected rebound in the Financials (let us prey that there are no more massive losses like Citigroup (C) and American International Group, Inc. (AIG) posted in 2008) the total net income for the S&P 500 is only expected to fall 10.9% in 2009, after a 19.0% decline in 2008. Just because the entire sector is expected to not lose money in aggragate, it does not mean that they are going to be in good shape.

Aside from the special case of the Financials, this is shaping up to be a very bad year for earnings. For 8 of the 10 sectors, things are expected to be significantly worse in 2009 than in 2008. Or as is the case with 5 of the sectors, they saw earnings grow in 2008 and are now expected to see them decline in 2009.

Total Net Income Growth (Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 A	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Technology	28.09%	7.10%	1.10%	-16.86%	18.46%	27.77%	-1.62%	6.32%
Cons. Disc.	-1.78%	-6.37%	-0.36%	-20.70%	11.40%	9.90%	-7.76%	2.46%
Cons. Stap.	4.40%	-0.52%	-17.93%	-7.78%	12.36%	5.76%	0.65%	8.71%
Industrial	-19.55%	0.53%	-64.45%	-55.47%	12.04%	-11.22%	-32.77%	-3.47%
Financials	-10.97%	-146.87%	-173.95%	-127.67%	-22.57%	-37.71%	-164.29%	-100.77%
S&P	5.25%	-3.88%	-16.43%	-22.54%	11.84%	10.16%	-9.54%	7.03%

Total Net Income (Reported)
Sector	Q1 '09	Q1 '08	Q4 '08	Q4 '07
Technology	$2,093	$2,071	$2,270	$2,120
Cons. Disc.	$1,653	$1,659	$1,066	$1,139
Cons. Stap.	$1,385	$1,687	$1,470	$1,478
Industrial	$169	$475	$565	$562
Financials	-$177	$239	-$91	$195
S&P	$5,124	$6,131	$5,280	$5,494

Total Net Income Growth (Not Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	7.07%	8.51%	-4.19%	-2.10%	19.75%	11.75%	-2.00%	10.82%
Utilities	-5.72%	-0.63%	-6.14%	-5.27%	10.76%	2.96%	-0.67%	10.15%
Cons. Stap.	14.03%	1.70%	-14.95%	4.47%	6.82%	15.16%	1.18%	6.58%
Financials	-90.41%	-1017.09%	-24.15%	-29.13%	-18.11%	-107.61%	-646.50%	57.52%
Telecom	-15.97%	-16.59%	-26.70%	-27.10%	18.24%	-4.42%	-21.77%	9.62%
Industrial	1.17%	-20.26%	-35.82%	-31.50%	14.00%	1.52%	-24.73%	6.70%
Technology	6.09%	-20.77%	-38.92%	-33.84%	10.89%	17.48%	-24.03%	22.60%
Energy	56.73%	-25.55%	-56.52%	-60.30%	8.99%	21.80%	-52.12%	31.74%
Materials	2.03%	-80.22%	-80.14%	-72.51%	9.85%	-9.66%	-51.23%	54.40%
Cons. Disc,	-51.75%	-152.17%	-107.31%	-33.36%	0.50%	-65.89%	-8.88%	144.62%
S&P	-12.13%	-63.97%	-37.92%	-31.24%	3.02%	-20.02%	-10.60%	25.06%

Total Net Income Growth (Combined)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	7.07%	8.51%	-4.19%	-2.10%	19.75%	11.75%	-2.00%	10.82%
Utilities	-5.72%	-0.63%	-6.14%	-5.27%	10.76%	2.96%	-0.67%	10.15%
Cons. Stap.	13.38%	1.53%	-15.20%	3.60%	7.20%	15.34%	0.40%	6.72%
Financials	-90.03%	-990.58%	-26.17%	-29.99%	-18.13%	-107.24%	-668.23%	58.32%
Telecom	-15.97%	-16.59%	-26.70%	-27.10%	18.24%	-4.42%	-21.77%	9.62%
Technology	7.46%	-18.88%	-35.76%	-32.09%	11.41%	19.16%	-22.85%	20.96%
Industrial	0.64%	-19.77%	-36.48%	-32.04%	13.94%	1.05%	-24.85%	6.47%
Energy	56.73%	-25.55%	-56.52%	-60.30%	8.99%	21.80%	-52.12%	31.74%
Materials	2.03%	-80.22%	-80.14%	-72.51%	9.85%	-9.66%	-51.23%	54.40%
Cons. Disc,	-43.68%	-140.89%	-95.01%	-31.11%	1.40%	-57.83%	-11.20%	109.76%
S&P	-11.61%	-62.06%	-37.19%	-30.95%	3.24%	-18.96%	-10.86%	24.41%

Scorecard and Median EPS Growth Rates

• Early first-quarter results weak with median EPS down 9.2%
• Surprise ratio at 1.00, median surprise 0.00% with 11 firms reporting
• A 20.3% decline is seen in the first quarter
• Every sector but Health Care is expected to be down
• Second quarter to be only slightly better, down 13.9%
• Implied second-half rebound with full year 2009 expected to be up 6.7%

Only a handful of firms have reported their first quarter results. These are all companies with fiscal periods ending in February, and are hardly a representative sample.

However, from it early results it looks like we might be in for another tough quarter. Normally positive earnings surprises far exceed earnings disappointments, but so far they are equal. Median results can jump around quite a bit in the early going, so these are just very tentative clues as to the direction of the quarter. In some ways it is likely to get even worse than the current numbers show.

While the 11 that have already reported are showing a median EPS decline of 9.2%, the remaining 489 firms are expected to post a drop of 20.0%. The only sector that is expected to post positive EPS growth is Health Care. Utilities, Staples and Telecom are expected to hold up pretty well with low- to mid-single digit declines. Every other sector is expected to see a decline of well over 20%.

As things stand now, the expectations for the second quarter show a little bit of improvement, with year-over-year declines of "just" 13.9%. While the expectations for the third and fourth quarters are not shown (and the sample of direct estimates for those quarters is very thin in any case), we can infer a very dramatic rebound in median EPS growth in the second half.

For the full year the median EPS growth rate is expected to be a positive 6.7%. I find that to be extremely optimistic.

First-Quarter Scorecard (Reported)
Sector	1Q '09 (A)	2Q '09 (A)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Cons. Disc.	7.61%	-1.02%	7.51%	-1.64%	3.40%	6.33%	17.65%	5	0	0
Tech	-7.69%	-34.88%	25.97%	-32.09%	5.68%	6.67%	9.68%	3	0	2
Cons. Stap.	-9.20%	-2.27%	10.65%	7.62%	8.17%	12.20%	-2.99%	1	3	1
Industrial	-43.36%	-39.31%	-5.25%	-23.73%	-0.84%	3.39%	-18.06%	0	2	0
Financial	-172.00%	-130.90%	-37.71%	-164.30%	-100.80%	1.23%	-227.30%	0	1	0
S&P 500	-6.77%	-12.57%	9.07%	-7.05%	5.95%	3.60%	4.05%	9	6	3

First-Quarter EPS Growth (Not Reported)
Sector	1Q '09 (E)	2Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Healthcare	3.49%	5.20%	18.31%	13.56%	11.42%
Utilities	-3.21%	0.00%	9.28%	3.79%	8.47%
Cons. Stap.	-4.29%	-2.00%	12.61%	8.94%	9.32%
Telecom	-5.07%	-11.76%	-2.94%	3.03%	0.44%
Industrial	-23.49%	-20.72%	16.57%	13.88%	7.94%
Energy	-27.27%	-45.83%	12.83%	21.40%	19.63%
Financial	-29.17%	-25.49%	9.37%	-21.06%	8.32%
Cons. Disc.	-33.33%	-23.59%	11.51%	-12.60%	11.51%
Tech	-34.21%	-23.96%	14.19%	17.74%	9.16%
Materials	-59.26%	-41.95%	12.20%	-4.62%	13.85%
S&P 500	-20.28%	-13.92%	13.30%	6.65%	10.15%

The Zacks Revisions Ratio: 2009

• Revisions ratio for full S&P 500 down to 0.29, from 0.30 last week
• All sectors back in negative territory
• 8 sectors have at least 2 cuts for every increase; 6 have at least 4 cuts per increase
• Ratio of firms with rising to falling mean estimates at 0.25, up from 0.23
• Total number of revisions (4-week total) down to 2,060 from 2,191 last week (-6.0%)
• Increases down to 465 from 511 (-9.0%), cuts down to 1,595 from 1,680 (-5.1%)
• Estimate activity nearing seasonal low

The revisions ratio reversed a gradual uptrend it had been in for several weeks, and remains in very negative territory. Generally we consider anything below 0.80 to be negative, and anything above 1.25 to be positive. Only health Care has made into neutral territory.

The overall pace of estimate revisions is slowing dramatically, as it usually does after earnings season is over. Since the revisions ratio is based on the 4-week moving totals of estimate changes, the rise in the ratio may have more to do with old estimate cuts falling off than it does with new estimate revisions.

The revisions picture, while still quite negative, has improved significantly in recent weeks for the Technology sector. Telecom is also relatively strong, but that is based on a small sample size of estimate revisions. On the downside, the Industrials sector is looking particularly weak with over 17 cuts for every increase. That is far worse than even the perpetual estimate revision cellar dweller, the Financials, where cuts outnumber increases by less than 5:1.

Keep in mind, that after an earnings season is over, the total number of revisions always falls. The revisions ratios are based on 4-week moving totals of estimate revisions. Thus when the total number of revisions is falling, changes in the revisions ratios are affected more by old estimate changes falling out of the totals as by new estimate changes being made.

Sector	Avg. 4wk EPS Change (FY1)	Revisions Ratio	Firms With FY1 EPS Increase	Firms With FY1 EPS Decrease
Technology	-4.73%	0.63	29	43
Telecom	-2.96%	0.52	1	7
Consumer Disc	-3.16%	0.45	17	54
Health Care	-0.41%	0.39	16	33
Energy	-8.86%	0.25	1	38
Consumer Staple	-1.63%	0.23	8	31
Financial Services	-4.03%	0.21	10	68
Materials	-10.49%	0.19	4	20
Utilities	-3.62%	0.19	4	30
Industrials	-4.71%	0.06	4	51
S&P 500	-4.17%	0.29	94	375

The Zacks Revisions Ratio: 2010

• Sample size of 2010 revisions is thin, but starting off weak
• Revisions ratio rises to 0.27 from 0.26 last week
• More than 3 cuts per increase for 6 sectors, more than 2 per increase in 9 sectors
• Telecom, Health Care the "strongest"; Industrials, Financials weakest for 2010
• Ratio of rising to falling mean estimates rises to 0.28 from 0.24
• Total number of revisions rises to 1,326 from 1,299 (2.0%)
• Estimate increases rise to 283 from 267 (-6.0%), cuts rise to 1,043 from 914 (14.1%)

The 2010 revisions ratio story is pretty much the same as 2009. A gradual pattern of a low but improving revisions ratio was slightly reversed this week. In a bit of a surprise, the total number of revisions actually grew this week, counter the normal seasonal pattern.

The very small Telecom sector (23 total revisions) and Health Care the best on a relative basis, but nothing to really write home about. The Consumer Discretionary sector has also improved significantly in recent weeks, but still faces more than two cuts for each increase. As with 2009, the Industrials sector was far and away the weakest, with Financials, Energy and Materials also very weak. However, in recent days the price of oil has started to rebound. If that holds, it seems likely that the estimates could start to head up again for the energy sector. As it stands now, the size of the cuts in the sector is very large.

Sector	Avg. 4wk EPS Change (FY2)	Revisions Ratio	Firms With FY2 EPS Increase	Firms With FY2 EPS Decrease
Telecom	-1.89%	0.92	2	6
Health Care	-0.45%	0.48	19	30
Consumer Discr	-7.05%	0.48	16	53
Technology	-1.52%	0.46	20	47
Utilities	-5.09%	0.30	9	21
Consumer Staples	-1.28%	0.26	8	30
Materials	-8.87%	0.22	4	20
Energy	-11.17%	0.19	3	36
Financial Services	-7.17%	0.17	12	61
Industrials	-4.09%	0.05	6	48
S&P 500	-4.93%	0.27	99	352

Earnings Shares and P/Es

• P/Es are too low since earnings estimates are too high
• Earnings shares, including historical, based on current make up of S&P 500
• Health Care expected to take earnings crown from Energy in 2009 and keep it in 2010
• Energy's earnings share expected to plunge to 12.8% from 23.8%
• Financials' 2009 earnings share expected to rise to 12.1% from -2.1% in 2008.
• Consumer Discretionary market cap share is far above earnings shares (overvalued?)
• Health Care's market cap share is well below earnings shares (undervalued?)
• 12-month forward S&P P/E of 13.1 equates to earnings yield of 7.63% and is very attractive relative to 10-year T-note yield of 2.63%. It is only mediocre relative to 5.68% A-rated 10-year corporate.
• T-note rates are rising and more realistic earnings yields of near 6.15% based on lower earnings ($50) means the spread, while still attractive is not overwhelming.

Earnings Shares and P/Es
Sector	2008%	2009%	2010%	Market Cap %	P/E 2008	P/E 2009	P/E 2010
Technology	15.05%	14.88%	14.47%	18.30%	13.7	16.9	14.0
Health Care	14.76%	18.41%	16.40%	14.30%	10.9	10.7	9.7
Cons Staple	11.81%	14.89%	12.77%	13.84%	13.2	12.8	12.0
Energy	21.09%	12.81%	13.57%	12.90%	6.9	13.9	10.5
Financials	8.66%	12.14%	15.45%	10.84%	14.1	12.3	7.8
Industrials	12.68%	11.79%	10.09%	9.65%	8.6	11.3	10.6
Cons Disc.	4.11%	3.93%	6.62%	9.02%	24.7	31.7	15.1
Utilities	4.24%	5.13%	4.55%	4.03%	10.7	10.8	9.8
Telecom	3.96%	3.83%	3.37%	3.78%	10.7	13.6	12.4
Materials	3.63%	2.18%	2.71%	3.34%	10.3	21.1	13.7
S&P 500	100.00%	100.00%	100.00%	100.00%	11.2	13.8	11.1

Neil Malkin contributed significantly to this report.

Data in this report, unless stated otherwise, is through the close on Thursday 3/26/2009

Zacks Investment Research

Key Points:

• Initial first-quarter reports are not encouraging with net income down 20.0%
• Net income for all S&P 500 (SPX) companies projected to fall 37.2%
• 2009 expectations down 4.3% over the last month, 2010 down 4.5%
• Full-year net income expected to fall 10.3% in 2009, after 18.9% fall in 2008
• P/Es based on 2009 estimates will prove to be to low as "E" plunges
• Bottom-up estimate for S&P 500 now $60.92 in 2009, down from $63.64 a month ago, I think we will be lucky if it is over $50.
• S&P 500 now expected to earn $75.75 in 2010, down from $79.29 last month.

Total Net Income Growth

As total earnings estimate activity wanes due to the end of the earnings season, and old estimates drop off our 4-week moving totals, the revisions ratios have started to rebound, and with them the number of huge mean estimate declines. However, make no mistake, the direction of estimates is still down, just at a some what slower pace.

The fourth-quarter earnings season, is completely finished, and good riddance. It was an unmitigated disaster, especially on a total net income basis. Things are not, however likely to improve that much in the first quarter. Sure it is unlikely that American International Group (AIG) will drop another $61 billion (or the adjusted $35 billion used in our calculations), but a total net income decline of 35.3% from a year ago is still very ugly.

However, Financials were not alone in seeing huge drops in net income. Only 2 sectors, the defensive Health Care and Staples sectors, managed to post higher total net income than a year ago, and neither by double digits. Utilities took the bronze for the quarter due to just a fractional decline in total income. Both the Financial and Consumer Discretionary sectors lost money as a whole in the fourth quarter. Materials saw their total earnings drop by over 80%

Looking ahead to the first quarter, every sector is expected to see a decline in total net income relative to the first quarter of 2008. For 8 of the sectors, the year-over-year declines are expected to be worse than the fourth quarter. All told, a 35.3% year-over-year decline is currently expected.

The only exceptions are the Financial and Materials sectors. While the Financials may break back into the black this quarter, I suspect that they will do much worse than the 21.8% decline currenly forecast. As for the Materials, it's hard to get to excited about a 72% decline in earnings, even if that is not as bad as an 80% decline. The early read on the second quarter is also downbeat, with a 29.2% decline expected.

Consumer Staples are expected to post a slight gain in total net income, and the Health Care and Utilities sectors are expected to have only minor declines. Easy year ago comps will help keep the decline in the Consumer Discretionary sector to "just 19.2%". All other sectors are expected to see drops of more than 25%.

Looking at the full year data, the Financial sector is expected to return to profitability. Even though both the 2008 and 2009 numbers show negatives of over 100%, they mean very different things. In 2008 the sector went to a negative from a positive, and in 2009 the sector is expected to go to a positive from a negative. Mathematically it does not make any difference which direction you head through zero, but economically it sure does.

Mostly as a result of the expected rebound in the Financials (let us prey that there are no more massive losses like Citigroup (C) and AIG posted in 2008) the total net income for the S&P 500 (SPX) is only expected to fall 10.3% in 2009, after a 18.9% decline in 2008.

However, for 8 of the 10 sectors, things are expected to be significantly worse in 2009 than in 2008. Not only is the total net income expected to be lower, but the size of the decline is expected to be larger in 2009 than in 2008. Or as is the case with 5 of the sectors, they saw earnings grow in 2008 and are now expected to see them decline in 2009.

Total Net Income Growth (Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 A	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Cons. Disc.	6.18%	5.52%	3.66%	1.29%	9.58%	19.64%	5.01%	5.80%
Technology	31.94%	9.37%	1.99%	-13.29%	18.61%	29.31%	-0.46%	6.96%
Cons. Stap.	6.53%	13.77%	-20.10%	-11.28%	10.93%	10.67%	-1.67%	7.63%
Industrials	-19.55%	0.53%	-64.45%	-49.55%	12.04%	-11.22%	-28.37%	4.46%
Financials	-10.97%	-146.87%	-173.95%	-98.41%	-22.57%	-37.71%	-115.88%	-294.03%
S&P	10.87%	0.44%	-19.98%	-18.52%	11.04%	13.33%	-7.54%	8.34%

Total Net Income (Reported)
Sector	Q1 '09	Q1 '08	Q4 '08	Q4 '07
Technology	$1,939	$1,901	$2,078	$1,900
Cons. Disc.	$711	$686	$584	$553
Cons. Stap.	$509	$637	$757	$665
Industrials	$169	$475	$565	$562
Financials	-$177	$239	-$91	$195
S&P	$3,151	$3,938	$3,892	$3,875

Total Net Income Growth (Not Reported)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	7.07%	8.51%	-4.13%	-2.03%	19.71%	11.78%	-1.97%	10.91%
Utilities	-5.99%	-0.62%	-6.38%	-5.15%	10.56%	2.94%	-0.66%	10.10%
Cons. Stap.	13.63%	0.57%	-15.37%	3.20%	7.09%	14.95%	1.06%	6.73%
Financials	-90.41%	-1017.09%	-23.64%	-29.19%	-18.12%	-107.61%	-646.03%	58.39%
Telecom	-15.97%	-16.59%	-26.92%	-27.20%	18.23%	-4.41%	-21.74%	9.55%
Industrial	1.62%	-20.25%	-34.74%	-30.23%	9.99%	2.12%	-23.57%	6.11%
Technology	6.06%	-20.71%	-38.14%	-33.22%	11.19%	17.23%	-23.42%	22.30%
Energy	56.73%	-25.55%	-56.45%	-60.29%	8.97%	21.80%	-51.78%	31.57%
Materials	2.03%	-80.22%	-78.86%	-69.86%	10.18%	-8.34%	-48.07%	47.87%
Cons. Disc.	-46.46%	-146.61%	-103.48%	-23.34%	1.27%	-61.45%	-9.43%	124.41%
S&P	-11.96%	-63.48%	-37.58%	-30.49%	2.77%	-19.62%	-10.15%	24.75%

Total Net Income Growth (Combined)
Sector	Q3 '08 A	Q4 '08 A	Q1 '09 E	Q2 '09 E	2007 A	2008 A	2009 E	2010 E
Health Care	7.07%	8.51%	-4.13%	-2.03%	19.71%	11.78%	-1.97%	10.91%
Utilities	-5.99%	-0.62%	-6.38%	-5.15%	10.56%	2.94%	-0.66%	10.10%
Cons. Stap.	13.38%	1.03%	-15.51%	2.79%	7.20%	15.21%	0.64%	6.75%
Financials	-90.03%	-990.58%	-25.66%	-29.79%	-18.14%	-107.25%	-669.90%	58.83%
Telecom	-15.97%	-16.59%	-26.92%	-27.20%	18.23%	-4.41%	-21.74%	9.55%
Technology	7.46%	-18.88%	-35.23%	-31.29%	11.65%	18.97%	-22.39%	20.89%
Industrial	1.08%	-19.77%	-35.42%	-30.66%	10.05%	1.63%	-23.60%	6.07%
Energy	56.73%	-25.55%	-56.45%	-60.29%	8.97%	21.80%	-51.78%	31.57%
Materials	2.03%	-80.22%	-78.86%	-69.86%	10.18%	-8.34%	-48.07%	47.87%
Cons. Disc.	-43.68%	-140.89%	-98.38%	-20.84%	1.56%	-57.97%	-8.63%	109.49%
S&P	-11.55%	-62.05%	-37.20%	-30.20%	2.90%	-18.87%	-10.26%	24.33%

Scorecard and Median EPS Growth Rates

• A 20.0% decline is seen in the first quarter
• Every sector but Health Care expected to be down
• Second quarter to be only slightly better, down 13.9%
• Implied second half rebound, full year 2009 expected to be up 6.7%
• Early 1Q results weak, Median EPS down 9.2%
• Surprise ratio at 1.00, median surprise 0.00% with 11 firms reporting

Only a handful of firms have reported their first quarter results. These are all companies with fiscal periods ending in February, hardly a representative sample.

Based on the early results, it looks like we might be in for another tough quarter. Normally positive earnings surprises far exceed earnings disappointments, but so far they are equal. Median results can jump around quite a bit in the early going, so these are just very tentative clues as to the direction of the quarter. In some ways it is likely to get even worse than the current numbers show.

While the 11 that have already reported are showing a median EPS decline of 9.2%, the remaining 489 firms are expected to post a drop of 20.0%. The only sector that is expected to post positive EPS growth is Health Care. Utilities, Staples and Telecom are expected to hold up pretty well with low- to mid-single digit declines. Every other sector is expected to see a decline of well over 20%.

As things stand now, the expectations for the second quarter show a little bit of improvement, with year-over-year declines of "just" 13.9%. While the expectations for the third and fourth quarters are not shown (and the sample of direct estimates for those quarters is very thin in any case), we can infer a very dramatic rebound in median EPS growth in the second half. Full year median EPS growth rate is expected to be a positive 6.7%, a forecast. I find to be extremely optimistic.

First-Quarter Scorecard (Reported)
Sector	1Q '09 (A)	2Q '09 (A)	2008 (A)	2009 (E)	2010 (E)	% Reported	Median % Surprise	# Pos Surprise	# Neg Surprise	# Match
Cons. Disc.	7.61%	10.26%	17.70%	4.34%	6.64%	3.37%	17.65%	3	0	0
Tech	7.14%	-34.88%	29.90%	-32.09%	6.30%	4.17%	9.68%	2	0	1
Cons. Stap.	-17.44%	-7.65%	10.67%	-1.17%	7.62%	5.13%	-8.77%	0	2	0
Industrial	-43.36%	-34.14%	-5.25%	-20.37%	4.22%	3.70%	-18.06%	0	2	0
Financial	-172.00%	-107.10%	-37.71%	-115.90%	-294.00%	1.09%	-227.30%	0	1	0
S&P 500	-9.20%	-13.79%	10.65%	-8.84%	6.30%	2.20%	0.00%	5	5	1

First-Quarter EPS Growth (Not Reported)
Sector	1Q '09 (E)	2Q '09 (E)	2008 (A)	2009 (E)	2010 (E)
Healthcare	3.49%	5.20%	18.31%	13.56%	11.22%
Utilities	-3.03%	1.56%	9.18%	3.01%	8.95%
Cons. Stap.	-3.39%	-0.97%	12.56%	8.88%	9.15%
Telecom	-5.07%	-11.76%	-2.94%	3.03%	0.27%
Industrial	-23.91%	-15.87%	16.22%	13.97%	7.69%
Energy	-26.45%	-45.83%	12.83%	21.40%	17.08%
Financial	-29.17%	-27.07%	9.37%	-21.06%	8.26%
Tech	-31.91%	-23.91%	14.88%	17.74%	9.24%
Cons. Disc.	-33.33%	-23.48%	11.21%	-11.37%	10.61%
Materials	-56.47%	-36.44%	12.20%	-4.62%	13.96%
S&P 500	-20.00%	-13.91%	13.25%	6.70%	10.03%

The Zacks Revisions Ratio: 2009