FactSet Earnings Insight: 2018 First Quarter Earnings in Review

By
The FactSet Earnings Insight report provides summary statistics for the latest trends in the earnings of the S&P 500 companies. The dynamic paper that is constantly updated to stay with the most recent earnings trends addresses earnings estimates, earnings guidance, revenues, and more. The report is available here and will remain updated on that link, so be sure to check back every quarter to see the new data posted by FactSet.


From FactSet

Earnings season for the first quarter of 2018 is coming to a close with 93 percent of S&P 500 companies having already reported. Looking back, the first earnings season of the year proved to be a success despite broad volatile trading. According to FactSet, 78 percent of S&P 500 companies reported a positive EPS surprise and 77 percent reported a positive sales surprise. If the 78 percent number holds, it will be the highest recorded by FactSet.

So far, on average companies are posting earnings 7.5 percent above what is expected. This surprise rate is above the 1-year and 5-year average for surprises. Additionally, it will be the highest average earnings surprise since Q4 2010. Despite the surprises this quarter, 57 percent of the companies that reported from the S&P 500 issued negative EPS guidances. This statistic is surprising given that S&P 500 companies see double digit earnings growth through the entirety of 2018.

Valuations remain elevated. The forward P/E ratio of 16.4 is currently above the five-year average of 16.1. With oil running up to recent highs, the Energy sector reports the highest forward 12-month P/E at 20.2. On the lower end, two sectors that have underperformed since the beginning of the year, Telecom and Financials, report the lowest P/E ratios at 10.0 and 14.1.



Information Technology stocks in the S&P 500 had the best Q1 earnings out of all the sectors with 92 percent of companies reporting above estimates. Healthcare, Consumer Staples, and Materials all reported above-average estimate percentages above the S&P 500 beat average. Energy came in slightly below the average at 77 percent despite energy prices trending upwards. At the bottom, sectors with lower growth rates saw the lowest estimate beat rates, Utilities, Telecoms, and Real Estate.



On average, the S&P 500 saw 77 percent of its companies report revenues above the estimates, very similar to its earnings beat rate. Two sectors stuck out on the revenue side of things. Real Estate saw 85 percent report higher earnings than estimates this quarter despite having the lowest rate of beats. On the other hand, Healthcare saw below average rates of revenue beats despite being having a high rate of beats.


The report here for more in-depth analysis.

Comments

Post a Comment

Popular posts from this blog

Prolonged Tariff Dispute Threatens the Farming Industry: Lessons from the 1980s

By
Image
President Trump's protectionist trade policies have been one of his more contentious economic policies garnering resistance from critics of all political leanings. The tariff dispute between the United States and China is the most well-known consequence of these policies and has resulted in economic growth worries. The U.S. stock market sat on the brink of a full-on bear market at the end of 2018 but recovered sharply in the first two months of 2019. Observers continue to monitor negotiations between top U.S and Chinese conveys that have yet to produce a decisive trade agreement. Soybean and corn farmers are two groups within those observers that are watching closely in hopes of seeing their markets improve. According to Reuters , USDA Chief Economist Robert Johansson reported that “under the trade dispute, exports to China alone have plummeted by 22 million tonnes, or over 90 percent.” The dramatic reduction in Chinese exports so far has weighed on the latest 2019 projectio...
Read more

World Employment and Social Outlook Trends 2020

By
Image
The International Labour Organization (ILO) recently released its principal report of the upcoming year of 2020. The "World Employment and Social Outlook: Trends 2020" publication brings to the forefront the trends seen in the global workforce whether and how they are enhancing or inhibiting economic growth. The organization identified four forces that are changing the way we work and grow as a global society. As seen by the growth of inequality in most economies, "the lack of inclusiveness" is likely to "impair the ability of lower-income countries to reduce poverty and improve working conditions" especially in conditions of slower economic expansion. Despite largescale technological advancements that cause low-income economies to see an accelerated growth rate in high productivity jobs, those economies have lagged against their higher-income, more industrialized peers. The report points out that "between 2000 and 2018, the employment share...
Read more