Advertisement
YOU ARE HERE: LAT HomeCollections

WALL STREET, CALIFORNIA | Street Strategies

July 20, 1999|WALTER HAMILTON

Click Here for Earnings, Whisper Numbers and More

As an investment tool, the Internet is giving individuals access to truckloads of data that were recently off-limits to them. And nowhere is that more apparent than during quarterly earnings-report season, which is in full swing this week.

Thanks to the Net, small investors have access to many companies' earnings data immediately upon release. They also can track Wall Street profit estimates in advance of reports, listen to conference calls with analysts and tap into so-called whisper numbers.

For better or worse, Wall Street has become a slave to quarterly reports: Stock prices can rise or fall dramatically depending on whether a company meets analysts' expectations or sounds upbeat in its conference call, for example.

Even investors who can take a longer-term view of a stock are finding it increasingly important to know what Wall Street expects of the company in the short term and how the company describes its near-term business prospects.

To be sure, the earnings-related Net resources available to individual investors aren't perfect. Small investors still are barred from many conference calls, for example, and often must search several Web sites for all the earnings information they need.

Still, the data seem certain to improve as more Web vendors try to attract investors to their sites.

What follows is a look at Net resources available to investors who want to track Wall Street's official and unofficial profit estimates and how to get in on corporate-earnings conference calls.

Earnings Estimates: Where to Get Them

Analysts at Wall Street brokerages continually size up the prospects of companies they follow and publish estimates of quarterly and annual earnings.

In turn, three firms--First Call Corp., Zacks Investment Research Inc. and IBES International Inc.--have become well-known for tracking analysts' views and compiling "consensus" earnings estimates for thousands of companies.

For example, AMR Corp., the parent of American Airlines, will report its second-quarter earnings on Wednesday. On average, the 13 analysts following AMR expect it to report $1.68 a share, according to Zacks. So that is the "consensus" estimate.

All three earnings trackers offer free information on their Web sites, which are http://www.firstcall.com; http://www.zacks.com; and http://www.ibes.com. But many of their services, naturally, are subscription-based.

If you simply want to find current consensus earnings estimates for individual companies, many financial Web sites list projections from one of the three earningstrackers. The Zacks information above on AMR, for example, came from Yahoo Finance (http://finance.yahoo.com).

Several Web sites contain calendars with scheduled earnings release dates for individual companies. For example, at the bottom of the CBSMarketWatch.com (http://www.cbs.marketwatch.com) home page, investors can click on "Earnings Calendar & News" for a list of companies reporting profits over the next four weeks.

But earnings calendars are relatively new to many sites--and it shows. CBSMarketwatch.com doesn't let investors search by company. Neither does Microsoft's MoneyCentral (http://moneycentral.msn.com). In other words, investors can't simply enter a ticker symbol to find out when a company will report. They must instead scroll through each day's listing hoping to find the companies they're interested in.

Yahoo Finance, however, does have a way to find individual company reporting dates. Under "Reference" on the home page, go to "Calendars: Earnings."

'Whisper' Numbers: The Inside Scoop?

Whisper numbers are rumors that swirl on Wall Street about individual companies' earnings. They're unofficial, but they're sometimes more accurate projections of quarterly results than Wall Street analysts' consensus numbers.

Whisper numbers have come about in part because of the now-infamous earnings-management game companies and analysts play. Companies often downplay their prospects to analysts, making it easier to top the official consensus estimate.

Analysts, meanwhile, are happy to keep their official estimates lower--and easier for companies to hurdle--because clients are happy when companies beat projections and stock prices rise as a result.

In contrast to their official estimates, analysts are said to whisper more accurate predictions to favored clients in the days leading up to a company's earnings release.

Once limited to tight-knit circles on Wall Street, some whisper numbers have become widely disseminated the era of Internet chat rooms.

There's no denying the import of whisper numbers. Companies that top analysts' consensus estimates but fall short of the whisper number often see their shares slump in the short run.

At least four Web sites publish whisper numbers. But there are several caveats for individual investors.

Advertisement
Los Angeles Times Articles
|
|
|