GRANDPA EATS ALPO, 'CAUSE HE LISTENED TO DEAN IN '03:

Third-quarter earnings 'a total blowout' (Matt Krantz, 11/12/2003, USA TODAY)

After three dreadful years, there's proof that U.S. companies are roaring back.

About 90% of Standard & Poor's 500 companies have reported third-quarter earnings, and collectively they've turned in jaw-dropping 20.9% growth in operating earnings, excluding one-time items.

That gain — the sharpest since the economy peaked in early 2000 — helps justify the big rally in stocks this year and shows that years of painful cost cutting and layoffs, combined with a better economy, are paying off. [...]

Even analysts who closely watch earnings were caught off guard, because 60% of the companies beat expectations. "The third quarter was a total blowout on the upside — beyond what even the bulls would have hoped for," says Charles Blood, strategist at Brown Bros. Harriman. [...]

If there's a downside, it's that investors now expect the stellar earnings to keep coming. Analysts are predicting 22.4% growth in the fourth quarter, says Thomson First Call. Ed Keon, strategist at Prudential, thinks earnings may be even stronger.

You've got to pity the poor investors who listened to Democrats and got out of the markets.

Posted by Orrin Judd at November 13, 2003 9:45 AM