Earnings Reports and the Economy

Question

I read some articles about how this quarter will probably have bad earnings but so far (I know not many companies have reported), it seems like almost everyone beat earnings. This leads me to my main question, what percent of companies normally beat earnings expectation? Thanks

Answer 1

Factset provides stats on previous earnings as well as expected results for the current quarter.

Here are two links to recent earnings evaluations. You can Google for results from other quarters.

Link1

Link2

Since local management prefers some content rather than just a link which might expire, here is an example of the kind of data they provide that relates to your question:

May 31, 2019

Key Metrics

Earnings Scorecard: For Q1 2019 (with 98% of the companies in the S&P 500 reporting actual results for the quarter), 76% of S&P 500 companies have reported a positive EPS surprise and 59% have reported a positive revenue surprise.

· Earnings Growth: For Q1 2019, the blended earnings decline for the S&P 500 is -0.4%. If -0.4% is the actual decline for the quarter, it will mark the first year-over-year decline in earnings for the index since Q2 2016 (-3.2%).

· Earnings Revisions: On March 31, the estimated earnings decline for Q1 2019 was -4.0%. Eight sectors have higher growth rates today (compared to March 31) due to upward revisions to EPS estimates and positive EPS surprises.

· Earnings Guidance: For Q2 2019, 84 S&P 500 companies have issued negative EPS guidance and 26 S&P 500 companies have issued positive EPS guidance.

· Valuation: The forward 12-month P/E ratio for the S&P 500 is 15.9. This P/E ratio is below the 5-year average (16.5) but above the 10-year average (14.8).

July 12, 2019 Key Metrics

· Earnings Growth: For Q2 2019, the estimated earnings decline for the S&P 500 is -3.0%. If -3.0% is the actual decline for the quarter, it will mark the first time the index has reported two straight quarters of year-over-year declines in earnings since Q1 2016 and Q2 2016.

· Earnings Revisions: On March 31, the estimated earnings decline for Q2 2019 was -0.5%. Ten sectors have lower growth rates today (compared to March 31) due to downward revisions to EPS estimates.

· Earnings Guidance: For Q2 2019, 88 S&P 500 companies have issued negative EPS guidance and 26 S&P 500 companies have issued positive EPS guidance. If 88 is the final number for the quarter, it will mark the second highest number of S&P 500 companies issuing negative EPS guidance for a quarter since 2006.

· Valuation: The forward 12-month P/E ratio for the S&P 500 is 17.1. This P/E ratio is above the 5-year average (16.5) and above the 10-year average (14.8).

· Earnings Scorecard: For Q2 2019 (with 24 of the companies in the S&P 500 reporting actual results for the quarter), 20 companies have reported a positive EPS surprise and 17 companies have reported a positive revenue surprise.