December 12, 2002

Earnings are the centerpiece of stock market valuation models, so it is incumbent of portfolio managers to obtain reasonable estimates of the earnings potential of individual company stocks and the overall economy. Two of the most common sources of aggregate earnings are the S&P and the National Income and Product Accounts. The S&P reports two alternative measures of the earnings per share of the stocks in the index. The “as reported” and “operating” earnings tell pretty much the same story. The earnings rose steadily throughout the decade and during the century date change the earnings abruptly crashed. Two differences between the two series are readily noticed: The “operating” earnings are much smoother than the “as reported” earnings are and a persistent divergence beginning around 1997 is clearly noticeable.

You must have an active account to view these reports. You may register for a trial here

Download Complete Report in PDF Format

Download Complete Report in Word Format