Profit Gains Expected in 2nd Quarter

Corporate earnings are poised to extend a more than three-year string of double-digit gains in the second quarter as the commodity price boom boosts profits of companies such as steelmakers and oil refiners, analysts say.

Even though the economy is likely to slow in the quarter, market watchers expect companies to build on a strong first quarter in which earnings from Standard & Poor’s 500 index companies will rise 13.4%, according to Reuters Estimates.

“Energy prices are going to continue to go up with increased demand over the summer, and commodity prices are going to continue to go up,” said Reuters’ Ashwani Kaul.

Although the energy sector has seen the biggest earnings gains, expectations for basic materials and the industrial sectors have improved dramatically.

For the year, earnings in the basic materials sector are expected to grow 13.2%, up from estimates of 3.1% three months ago, according to Zacks Investment Research.

Of the 348 S&P-listed; companies that reported results through Friday, 71% beat earnings-per-share estimates, 13.5% posted results in line with forecasts and 15.5% missed. Zacks predicts a 9.5% increase in second-quarter earnings, based on first-quarter results.