

Q:What can investors expect for second-quarter profit?

A: Investors are getting spoiled by the record-setting level of corporate profit. Some, though, are wondering when company's net income bonanza will end.


Standard & Poor's 500 companies reported a record quarterly profit of $26.71 a share in the first quarter, up 5.2%. Strong earnings growth from telecom and consumer discretionary companies, of 18% and 12% respectively, were driving forces from first-quarter earnings growth.

But so far, companies aren't exactly acting bullish about the current second quarter. So far, 110 companies have given investors guidance on how well the second quarters are going relative to expectations, and the numbers aren't encouraging, says S&P Capital IQ. Of the 110 companies to give guidance, 79 have been negative and 18 positive, a ratio of 4 to 1. The balance between negative and positive companies is much higher than the 2.1 average.

All told, analysts expect S&P 500 companies to report 3.5% higher earnings in the second quarter. But analysts have been cutting their forecast aggressively since last year so it will be telling to see how the quarter winds up.

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