High Tech Expectations Bode Well
Better-than-expected tech earnings and positive outlooks are good signs for the broader economy.
Third-quarter earnings season continues to be dominated by a single theme: firms beating expectations. With a few notable exceptions (such as eBay (EBAY)), companies are reporting that their quarters were better than most analysts were expecting, and in many cases better than even management had hoped for.
But even more surprising than third-quarter results, many management teams have turned positively bullish on the prospects for the rest of 2009 and into 2010. One notable example was Caterpillar (CAT), where management is expecting a robust recovery next year as the economy picks up and infrastructure spending expands. This doesn't just seem like pie-in-the-sky optimism either. Senior equity analyst Adam Fleck thinks that the projected 10%-25% top-line growth is attainable, and he raised his fair value estimate to reflect the improved economic situation.
Jeremy Glaser has a position in the following securities mentioned above: MSFT. Find out about Morningstar’s editorial policies.