S&P equity analysts provide their expectations for the year ahead in the industrials, info tech, materials, telecom services, and utilities groups

From Standard & Poor’s Equity Research

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What be possible to investors expect for key cattle-market sectors? Analysts from S&P Equity Research Services offer their views in this two-part story ( ). Part two follows:

INDUSTRIALS

In light of the current pecuniary conjuncture and the widespread negative impact it is having upon the global economy, along with much lower oil prices and the adverse exterior exchange impinging of a stronger U.S. dollar, we give attention to ongoing faint operating results in many industrials businesses.

However, many governments throughout the earth are planning substantial stimulus efforts. With these initiatives focusing mostly on firmer financial markets and considerable levels of infrastructure expenditure, we think the greatest beneficiaries will be the companies that put up to sale construction equipment (charge of construction and farm machinery, and weighty trucks) and, in sure cases, industrial machinery and building products.

INFORMATION TECHNOLOGY

We have a cautious view of the technology sector given the generally received U.S. recession and immense global household uncertainties.

We think a decline in semiconductor sales coupled with largely fixed-cost operating structures will hurt 2009 profitability and earnings. As a result of this and an oversupply of chips, we expect equipment spending to decline 25% to 35% in 2009.

We also mark a challenging environment for hardware, and project that global PC unit shipments will ascend only 4% in 2009. For IT service companies, we look forward to slower revenue growth. We think demand for trade process outsourcing will become greater as clients cut costs. Lower turnover and easing wage pressure should assist offshore outsourcers.

MATERIALS

We expect the sink in the housing market to continue, which should wish every conflicting collision on demand and pricing for timber products. Similarly, paper packaging companies, suffering from a weak economy and lack of available credit, should see lower demand for corrugated packaging.

In the chemicals industry, we look forward to lower chemical product prices and a focus on reducing inventories and purchases with end-market demand slowing. A slowing U.S. economy is likely to pass to diminish domestic steel shipment volumes, higher imports, lower steel prices, and lower earnings in 2009.

TELECOMMUNICATIONS SERVICES

We are positive on the telecom services industry, since we expect the carriers, through broadband produce and cost savings, to generate strong lax cash flow to support dividends. We contend that bundled telecom services and, in particular, wireless will remain core to consumers, serving as a driver for the largest integrated telecom companies.

We believe that cash flows at independent wireless service providers in developed countries will subsist stable, but they could look margin influence, as emulation continues to intensify through price cuts, incentives, and handset subsidies.

Increased voice and data traffic, due to demand for new smartphones and unlimited packages, should spur growth for wireless tower providers.

UTILITIES

We wait for utility stocks to move in line by the broader market in 2009. We believe an above-average share yield for the S&P 500 utility stocks looks favorable. However, with the credit markets tense, many utilities have deferred some of their infrastructure expansion projects, and we expect to see capital expenditures for electric utilities reduced by more than 10%.

We see increasing profits for the electric and gas utilities from reprove increases, population growth, expanded electric and gas transmission operations, and higher wholesale power margins (as expiring sway contracts were renewed at higher prices), in some degree offset by dint of. uncollectible accounts and subside per-customer consumption.

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