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The let-down by the financial sector for the fourth quarter of 2007

2008-01-15 13:54:41 (GMT) (Caymanmama.com - Banks & Banking News)



If the results from financial sector are to be ruled out, it can be said that an upward graph in earnings of the fourth quarter is more than likely. “It’s pretty much all their fault at this point” commented David Dropsey, a senior research analyst with Thomson Financial, tracker of earnings.

The main reason for this, that was tracked on Tuesday, was the anticipated loss of at least $1 every share by the biggest companies of the economic sector that included banks such as Citigroup. The total loss which is therefore anticipated is 74% for the fourth quarter, as suggested by Thomson Financial.

To be more specific, the biggest financial companies of the nation earned around $25 billion during the fourth quarter of 2006 but for the same quarter of 2007 is estimated a loss of $10 billion.

The combined loss from the largest banks along with investment banks and firms like Merrill Lynch and Bank of America is estimated to be $5 billion for the fourth quarter of 2007. This is presented in contrast to the $9 billion earnings of the same quarter of 2006.

When calculated for the profits earned by complete banking sector, a fall of 59 percent was anticipated for every preceding year.

The point of relief came when on Monday the strong earnings of IBM made clear that the fall is restricted to the financial sector only, as opposed to technology and thankfully energy companies as well, due to the record breaking soaring oil prices. Telecom, utilities and healthcare industries will not be disappointing either.



NewsReporter · Filed Under Banks & Banking 

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