S&P 500 Earnings Season Update: February 2

To date, 50% of the companies in the S&P 500 have reported actual results for Q4 2017. In terms of earnings, more companies are reporting actual EPS above estimates (75%) compared to the five-year average. In aggregate, companies are reporting earnings that are 4.0% above the estimates, which is below the five-year average. In terms of sales, more companies (80%) are reporting actual sales above estimates compared to the five-year average. If 80% is the final number for the quarter, it will mark the highest percentage of S&P 500 companies reporting positive sales surprises since FactSet began tracking this metric in Q3 2008. In aggregate, companies are reporting sales that are 1.4% above estimates, which is also above the five-year average.

Sector-Level Breakdown

The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the fourth quarter is 13.4% today, which is above the earnings growth rate of 12.2% last week. Positive earnings surprises reported by companies in multiple sectors were responsible for the increase in the earnings growth rate for the index during the week. All 11 sectors are reporting year-over-year earnings growth. Six of these sectors are reporting double-digit earnings growth.

The blended sales growth rate for the fourth quarter is 7.5% today, which is above the sales growth rate of 7.0% last week. Positive revenue surprises reported by companies in multiple sectors were responsible for the increase in the revenue growth rate for the index during the week. All 11 sectors are reporting year-over-year growth in revenues. Three sectors are reporting double-digit growth in revenues: Materials, Energy, and Information Technology.

Looking at future quarters, analysts currently project earnings to grow at double-digit levels through 2018.

The forward 12-month P/E ratio is 18.0, which is above the five-year average and the 10-year average.

During the upcoming week, 91 S&P 500 companies (including one Dow 30 component) are scheduled to report results for the fourth quarter.