• 87 or 17.4% of S&P Companies have reported through 10/16 close
• Surprise ratio at 1.79, median surprise at 2.63%, both somewhat below normal
• Median EPS growth at 7.07%, surprisingly good given the economic environment
• Energy (1 firm, up 1050.0%) and Materials (4 firms up 39.5%) doing best in early results
• Financials (Down 48.2%) doing the worst
• Expected Growth of 9.8% for those left to report
• Significant positive surprises: Peabody (BTU), Wells Fargo (WFC), Oracle (ORCL)
• Significant negative surprises: Progressive (PGR), Zions Bancorp (ZION), Harley-Davidson (HOG)

Share repurchases were still not very significant in the fourth quarter of last year and the first quarter of this year (the data is not out yet for the second quarter) and the reduction in share count also boosts EPS growth.

Currency translation gains will be less of a factor this quarter due to the rebound in the dollar. However, the strong overseas demand that the previously very weak dollar stimulated will still prove to be a boost to the earnings of many firms. The delay is because in the third quarter they will be shipping goods ordered previously. Given both the rebound in the dollar and the very significant economic slowdown abroad, look for the export boom to fade in the fourth quarter and into 2009.

Total Net Income Growth

• Total net income of those that have reported down 30.5% from last year
• Total reported net income so far $34.7 billion versus $49.9 billion for same firms last year
• Those firms earned $41.1 billion in the second quarter
• Combining results with expectations, earnings now expected to be down 10.1% year over year, which seems very optimistic
• Financials down 97.9% so far, a decline of 78.3% expected when all is said and done
• So far Financials account for 78.3% of total decline in net income
• Six sectors expected to post lower total earnings than a year ago
• Energy is the only sector expected to post robust growth, up 45.6%, Staples is next best -? up 5.2%
• Growth excluding Energy expected to be -19.8%
• Growth excluding Financials expected to be -6.8%
• Expectations for the 4th quarter dropping to +23.8%, but still look very optimistic to me.
• Full year net income in 2009 expected to be 17.8% above 2007 levels. Count me as extremely skeptical.