Last Update: November 17, 2017
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Aggregate Estimates and Revisions
- Third quarter earnings are expected to increase 8.2% from Q3 2016. Excluding the Energy sector, the earnings growth estimate declines to 5.9%.
- Of the 474 companies in the S&P 500 that have reported earnings to date for Q3 2017, 72.2% have reported earnings above analyst expectations. This is above the long-term average of 64% and in-line with the average over the past four quarters of 72%.
- Third quarter revenue is expected to increase 5.4% from Q3 2016. Excluding the Energy sector, the revenue growth estimate declines to 4.4%.
- 67.7% of companies have reported Q3 2017 revenue above analyst expectations. This is above the long-term average of 59% and above the average over the past four quarters of 60%.
- For Q4 2017, there have been 56 negative EPS preannouncements issued by S&P 500 corporations compared to 31 positive, which results in an N/P ratio of 1.8 for the S&P 500 Index.
- The forward four-quarter (4Q17 – 3Q18) P/E ratio for the S&P 500 is 18.2.
- During the week of Nov. 20, 15 S&P 500 company is expected to report quarterly earnings.
Exhibit 1: S&P 500 Y/Y Growth Rates
17Q3 Earnings Growth Highlights
The energy sector has the highest earnings growth rate (161.0%) of any sector. It is expected to earn $10.2B in Q3 2017, compared to earnings of $3.9B in Q3 2016. All of the six sub-industries in the sector are anticipated to see higher earnings than a year ago. The oil & gas equipment & services (482.4%) and oil & gas exploration & production (117.6%) sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to 64.8%.
The information technology sector has the second highest earnings growth rate (23.7%) of any sector. It is expected to earn $65.5B in Q3 2017, compared to earnings of $52.9B in Q3 2016. Eleven of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The semiconductor equipment (55.6%) and semiconductors (43.4%) sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to 18.3%.
The financials sector has the lowest growth rate (-7.3%) of any sector. It is expected to earn $44.7B in Q3 2017, relative to earnings of $48.2B in Q3 2016. Four of the 12 sub-industries in the sector are anticipated to see earnings decreases compared to Q3 2016, led by the reinsurance (-351.6%) and multi-line Insurance (-151.5%) sub-industries. If these sub-industries are removed, the growth rate improves to -0.4%.
17Q4 Earnings Growth Highlights
The estimated earnings growth rate for the S&P 500 for Q4 2017 is 11.5%.
The energy sector has the highest earnings growth rate (115.4%) of any sector. It is expected to earn $11.1B in Q4 2017, compared to earnings of $5.1B in Q4 2016. All of the six sub-industries in the sector are anticipated to see higher earnings than a year ago. The oil & gas exploration & production (566.5%) and oil & gas equipment & services (386.4%) sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to 66.8%.
The materials sector has the second highest earnings growth rate (25.5%) of any sector. It is expected to earn $5.7B in Q4 2017, compared to earnings of $4.6B in Q4 2016. Ten of the 11 sub-industries in the sector are anticipated to see higher earnings than a year ago. The fertilizers & agricultural chemicals (89.1%) and steel (79.4%) and sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to 21.1%.
The telecommunications services sector has the lowest growth rate (-1.8%) of any sector. It is expected to earn $7.9B in Q4 2017, relative to earnings of $8.1B in Q4 2016. One of the two sub-industries in the sector is anticipated to see earnings decreases compared to Q4 2016, led by the alternative carriers (-31.9%) sub-industry. If this sub-industry is removed, the growth rate improves to 0.2%.
Aggregate Estimates & Revisions
The estimate revision numbers below are an aggregate of the total number of earnings estimate revisions for the Fiscal Year 1 period for all companies in the United States over the previous seven days. Up revisions represent the total number of estimates for Fiscal Year 1 submitted in the past seven days that are higher than the previous estimates for Fiscal Year 1. Down revisions represent the total number of estimates for Fiscal Year 1 submitted in the past seven days of that are lower than the previous estimates for Fiscal Year 1.
Exhibit 2: S&P 500: Estimate Revisions by Sector
Exhibit 3: S&P 500: Estimate Revision History
Please note: if you use our earnings data, please source Thomson Reuters I/B/E/S
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