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Current Views

May 4, 2010: Current 1Q10 Earnings Season Shows Signs of Positive Strength

In this commentary we discuss the current earnings season. The majority of US companies have reported their Q1 results by now, and by and large the numbers have been very strong. Earnings growth in aggregate has been well over 50% on a year over year basis. However, to be fair this strong growth is largely the result of very easy comparisons as last year’s first quarter was an extremely difficult one due to the turbulent economic backdrop. That being said, earnings have exceeded analyst expectations by an impressive magnitude of over 15%. Perhaps most important of all, sales are growing in the low double digits, also exceeding analyst expectations. This is significant as cost cuts are no longer the sole driver for bottom line growth. While expense reductions have been very important in supporting corporate profitability, top line growth is a more sustainable earnings driver and is emblematic of an improving economy. These results support our near term sanguine view of the market. While we are cognizant of the risks emanating from a weakened European economy and the Greek fiscal crisis, and have modestly raised our risk management tools accordingly, in the aggregate we remain opportunistically positioned to benefit from a rebounding domestic economy.



This information is intended solely to report on investment strategies and opportunities identified by Roosevelt. Opinions and estimates offered constitute our judgment and are subject to change without notice, as are statements of financial market trends, which are based on current market conditions. This material is not intended as an offer or solicitation to buy, hold or sell any financial instrument. References to specific securities and their issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Please contact us at 646-452-6700 if there is any change in your financial situation, needs, goals or objectives, or if you wish to initiate any restrictions on the management of the account or modify existing restrictions, or if you would like to request a copy of our Code of Ethics. Our current disclosure statement is set forth on our Form ADV Part II, available for your review upon request, and on our website, www.rooseveltinvestments.com.

Past performance is not a guarantee of future results. Indices are unmanaged and cannot accommodate direct investment. Themes assigned as per Roosevelt Investments’ evaluation. Risk tools may include cash or other securities that we believe possess a low or inverse correlation to the overall market.


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The Roosevelt Investment Group, Inc. is an independent investment management firm that is not affiliated with any parent organization. The Roosevelt Investment Group, Inc. manages equity, fixed income, and balanced assets for primarily U.S. clients. The Roosevelt Investment Group, Inc. is an investment adviser registered with the U.S. Securities and Exchange Commission and notice filed in all 50 states.

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