US companies are more gloomy about their profit expectations ahead of the forthcoming reporting season than they have been since the grim third quarter of 2001, well into the economic slowdown.
"We're running more negative than we have been since then, when we were in the depths of a recession," said Mr Chuck Hill, director of research at data tracker Thomson First Call.
The figures indicate recovery is further away than investors had hoped. He said the ratio of negative pre-announcements to positive ones is 2.9 to 1 for the first quarter. That compares with 1.7 to 1 last year. The ratio has dropped sharply in this so-called "confessional season", against the previous quarter, fourth-quarter, 2002, when it was also 1.7 to 1.
Mr Hill said the ratio was not simply being run up by the woes of many small companies. The S&P 500 is running at 2.8 warnings to 1.7 upbeat announcements.
Investors take warnings from some industries more seriously than those from others. Technology stocks have been forced to readjust investor expectations. Last week saw 25 earnings warnings from technology companies, offset by just one upbeat piece of company guidance. Despite investors warming to tech stocks this year, the minute they heard warning noises from one important software company, they sold down the sector.
