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a different estimate, and the numbers could vary by considerable amounts. So which ones are the investors to believe?

First off, remember that an estimate is just that. It is a best guess judgment of a company's expected profits. No one knows what the company's earnings will be until they are actually released. Of course the company executives know, but they are by law forbidden to discuss earnings with anyone or use their knowledge for personal gain before its release. Those who do (for example, tip off a relative to buy the company's shares or options prior to a good earnings release) commit a major felony known as illegal insider trading, which is punishable by heavy fines and prison time. Beware of anyone giving you an insider tip: it's either bogus, or it could get you stiff fines.

Second, you would want to trust estimates published by reputable analysts from legitimate financial companies, such as Merrill Lynch, Goldman Sachs, AG Edwards, Salomon Smith Barney, CSFB, and the likes. Third, there are a number of companies out there whose job is to compile the earnings estimates from various analysts and publish a number as the consensus estimate, which is the average of all estimates published by reputable analysts. One of these companies is the well known Zacks Corporation that researches and publishes financial information about companies. The Zacks consensus estimate for various public companies is one of the most popular pieces of data used by investors. Zacks publishes several estimate numbers, including mean/consensus, high, and low estimates. Another popular source for earnings estimates is the First Call consensus estimate. First Call consensus estimate, furnished by the First Call Corporation (a unit of Thomson Financial), provides long and short-term estimate snapshots compiled from various analysts. …