S&P 500 Earnings for 2010 a Little Padded?
After some preliminary calculations, I'm getting that the average S&P 500 company added about $400M in deferred income taxes to it's balance sheet in 2010. That basically means that each S&P 500 company overstated net earnings by roughly $400M in 2010. So for the S&P 500, that means that earnings were overstated by about $200B dollars last year. Unless companies continue to put off their income taxes back to back years, 2011 earnings could disappoint drastically.
Here are some of the "heavy hitters:"
Change in Deferred Income Taxes (positive) Q1 2010 through Q1 2011: