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Brokers say 2009 earnings a write off

(5 June 2009) - Large asset writedowns, weakening margins and the stronger $A have seen analysts cut their earnings estimates yet again in May 2009. Profits are forecast to have dropped by 7.2% in 2008-09, the worst outcome since this survey started in 1988. Brokers have lowered their estimates in each of the past five months.

At the start of the financial year, analysts were forecasting stellar profit growth of 16.9%.

Gold, energy and defensive industrial stocks remain the favoured sectors while banking and finance stocks continue to dominate the 'sell' recommendations.

The most popular stock picks were CSL (ASX:CSL), Origin Energy (ASX:ORG), Oil Search (ASX:OSH), Crown (ASX:CWN), QBE Insurance (ASX:QBE) amd Newcrest Mining (ASX:NCM).

Among the least favoured stocks are National Australia Bank (ASX:NAB), Leighton Holdings (ASX:LEI), Commonwealth Bank (ASX:CBA), Alumina (ASX:AWC), ASX (ASX:ASX) BHP Billiton (ASX:BHP) and ANZ Banking Group (ASX:ANZ).

The outlook for 2009-10 is slightly more encouraging with earnings expected to grow by 6.4%.

Warning: The stocks mentioned in this article are not investment recommendations.