Lombardi Publishing Corporation’s Profit Confidential Warns Investors Not to Get Lured in by Early Third-quarter Corporate Earnings Success

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Profit Confidential, an e-letter of Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, warns that investors should tread with caution as we enter third-quarter earnings season.

Lombardi Publishing Corporation’s Profit Confidential Warns Investors Not to Get Lured in by Early Third-quarter Corporate Earnings Success

Lombardi Publishing Corporation’s Profit Confidential Warns Investors Not to Get Lured in by Early Third-quarter Corporate Earnings Success

“It’s because of lowered market expectations. Wall Street downgraded its expectations for the third-quarter earnings season, in line with lackluster GDP growth,” Leong says.

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Profit Confidential, an e-letter of Lombardi Publishing Corporation, a 26-year-old consumer publisher that has served over one million customers in 141 countries, warns that investors should tread with caution as we enter third-quarter earnings season.

In a recent Profit Confidential article, expert financial analyst George Leong states that analysts were warning that third-quarter earnings were going to be negative, and that it would lead to a sell-off. Now two weeks in, an earnings-driven sell-off has yet to materialize.

“It’s because of lowered market expectations. Wall Street downgraded its expectations for the third-quarter earnings season, in line with lackluster GDP growth,” Leong says.

As a result, earnings season has been better than expected. But, Leong warns, it’s still too early to give it a seal of approval.

According to Leong’s Profit Confidential article, Alcoa Inc., one of the world’s top aluminum makers, and a good barometer for the global economy, managed to beat lowered expectation of break-even for its third-quarter earnings season. At the same time, a six percent decrease in revenues for the period indicates slowing.

The Lombardi Publishing analyst adds, “Chipmaker Advanced Micro Devices, Inc. made a downward revision in its third-quarter revenues to below consensus, citing the global environment. It will be interesting to see if the issues that Advanced Micro Devices is experiencing are more company-specific or if they are sector-wide.”

According to Leong, analysts have reduced their outlook for the earnings season since the start of September; in his view, this has helped the results of those companies that have already reported. Of course, beating lower estimates is good, but Leong warns that investors shouldn’t get overly excited. The analyst thinks investors should continue to proceed with caution.

Source: Advanced Micro Devices, “AMD Announces Preliminary Third Quarter Results,” MARKETWIRE, October 11, 2012.

Founded in 1986, Lombardi Publishing Corporation, which has served over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more information on Lombardi Publishing Corporation, and to get its popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com. Or, visit http://www.lombardipublishing.com/customer-service.html.

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Michael Lombardi
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