CQ3 Positive Tech EPS Surprises at 68%; Negative Surprises at 27%

320 (77%) of 414 companies in our Technology Universe have reported CQ3:04 EPS
68% of the reporting companies had positive earnings surprises in CQ3:04 vs. 67% in CQ2:04 and 72% in CQ3:03. Note that the average quarterly positive surprise rate (since 1996) for the third quarter is 65%.


Earnings misses remain flat at 27% in CQ3
Earnings misses remained in-line at 27% of reporting companies in CQ3, vs. 28% in CQ2:04 but increased from 21% in CQ3:03.


Groups with the highest number of upside surprise rates:
Internet & PC Applications Software — Industry View: Attractive
(81% in CQ3 vs. 56% in CQ2:04)
Enterprise Software — Industry View: Attractive
(80% in CQ3 vs. 66% in CQ2:04)
Computer Services & IT Consulting — Industry View: In-Line
(76% in CQ3 vs. 74% in CQ2:04)


Groups with the highest number of downside surprise rates:
Semiconductors — Industry View: In-Line
(38% in CQ3 vs. 33% in CQ2:04)
Communications Equipment — Industry View: Attractive
(37% in CQ3 vs. 22% in CQ2:04)
EMS / Distributors / Connectors — Industry View: In-Line
(35% in CQ3 vs. 26% in CQ2:04)


Technology EPS Trends — CQ3:04 Update — Part 1 of 1 (17 pages)