Key Points:

• Fourth-quarter reports remain ugly, total net income for the 184 companies reporting so far is -43.7% versus a year ago
• The surprise ratio of 1.73:1 and the median surprise of 2.30% are both below "normal"
• Financials red ink so far is almost 7x year ago levels.
• Excluding Financials, total earnings are down 16.9%
• Fourth-quarter total net income is now expected to be -31.9%
• Trends continue to be terrible, 2009 expectations fell 6.64% in a week
• Estimate cuts running more than 5:1 over increases for both 2009 and 2010
• Total net income in 2009 now expected to fall 5.5%, following 12.9% 2008 decline
• P/Es based on 2009 estimates will prove to be to low as "E" plunges
• Bottom up estimate for S&P 500 now $66.60 in 2009, down from $69.04 on Tuesday and $71.34 a week ago, I expect it to be less than $60.

Total Net Income Growth

• The returns are very ugly, the 184 that have reported are showing earnings of just $44.5B aggregate versus total earnings of $79.1B a year ago and $89.5B in the third-quarter
• Already reported firms down 43.7% in fourth quarter, remaining firms expected to be down 22.0%
• Total net income expected to fall 31.9% in the fourth quarter from a year ago, was -29.0% a week ago
• Negative year-over-year growth in 4Q now expected for 7 sectors
• Health Care and Utilities only sectors reporting higher income so far
• Energy, Materials and Discretionary all expected to be down over 40% last quarter
• Financials gushing red ink
• Full year net income in 2009 expected to be down 5.5% from 2008 levels, following a 12.9% decline in 2008
• First quarter total net income now expected to be 22.3% below 1Q08, was -15.1% on Tuesday, and -13.7 a week ago
• Early 2010 expectations looks for 21.1% growth over 2009
• Index changes mask size of earnings decline in 2008 (Merrill Lynch, Wachovia, National City and AIG gone)