Investors bailed out of tech stocks in reaction to Cisco's earnings news yesterday and the dismal outlook for high-tech companies. Cisco's results cap off a difficult earnings season, and the forecast for the next two quarters is also bleak. Here's Suzanne Pratt with a look back and a look ahead. The results are nearly in for corporate America and it looks like the fourth quarter was a bit better than expected. While that was a lot slower than earlier in the year, it was slightly stronger than the 2 or 3 percent that was forecast.
Experts say two strong sectors underpinned the fourth quarter numbers.
Basically, the energy and utilities sectors came in well above what the expectations were at the time they reported. That's on top of having had the estimates go up during the quarter. But even with the fourth quarter's performance, experts still believe the first and second quarters of this year will experience an earnings recession. Negative 1.2 percent in Q1 and negative 0.5 percent in Q2. A return to positive profit growth is expected for the third quarter, but that number may be in jeopardy.