Lawrence Hamtil, a financial advisor at Fortunate Financial Advisors, notes that the sector’s heavy exposure to foreign markets paints an unflattering picture for earnings season. Potentially compounding the woes: Tech executives and shareholders are currently whistling past the profitability graveyard, according to Morgan Stanley chief U.S. equity strategist Michael Wilson.
“Tech and its industry groups saw the biggest increase in the percentage of companies missing fourth-quarter margin estimates, yet management commentary regarding margin expansion has continued to move to new highs,’’ he wrote in a note on Monday. “The inflection in tech margin misses is not a smoking gun, but it is a warning sign that earnings estimates may still be too high and we remain on the lookout for weakening guidance.’’
This article was provided by Bloomberg News.