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Wall Street analysts are predicting another round of strong profit growth for US blue-chip companies in the third quarter of this year underpinned by a robust economy, corporate tax cuts and share buybacks. Consensus estimates point to a 19.2 per cent jump in earnings per share for the three months to the end of September versus the same period a year ago, according to FactSet. That would follow about 25 per cent growth in each of the first two quarters of 2018 and, if it proves true, would be the strongest three-quarter stretch since 2010. The upcoming reporting season will heat up at a time when investors are grappling with a sharp uptick in yields on US Treasury bonds, which sent equities lower late last week. “As long as earnings expectations come through in the third quarter, stocks are likely to continue to do OK,” said Michael Arone, chief investment strategist at State Street Global Advisors. The prevailing trend over time is that analysts reduce their estimates as the quarter progresses. Companies then ideally beat the lower bar. Estimates fell by 1.1 per cent over the course of the third quarter, but at a lower rate than the five, 10 and 15-year average, FastSet said. “Historically, when the economy is robust as it is today, companies tend to beat expectations by a wider margin,” said Jonathan Golub, chief US equity strategist at Credit Suisse. “Over the past three months, earnings estimates, which typically fall before reporting season, have held up especially well. This is also likely the result of economic strength.” Working off a consensus estimate of 21 per cent growth in the quarter, Mr Golub calculated seven points of that coming directly from lower taxes and two points from stimulative government policies, neither of which are likely to repeat themselves over the next several years. Some two points can be attributed to buybacks, but he argued that given strong cash flows at companies, repurchases are likely to be sustained and should not be treated as one time in nature. Energy companies are expected to deliver the largest earnings gain in the third quarter with a 95 per cent jump driven largely by higher oil prices. Financials were next, with EPS seen up by a third helped by flattering comparisons for insurance companies, which faced losses from devastating hurricanes in 2017.