Q1 earnings growth rate for the S&P 500 back in positive territory this week

At this stage of the Q1 earnings season, almost half (48%) of the companies in the S&P 500 have reported actual EPS for the quarter. The blended growth rate (combines actual results for companies that have reported with estimated results for companies that have yet to report) now stands at 0.2%. This marks the first time that the earnings growth rate for Q1 has been in positive territory since the week ending on March 14 (also 0.2%).

The increase in the earnings growth rate since last Friday was due to the strong performance of corporate earnings relative to the expectations of analysts. During the past week, 120 of the 157 companies (or 76%) that released earnings results reported actual EPS above the mean EPS estimate. These 120 companies beat the EPS estimates by 14.7% on average.

As a result of these upside surprises, the net increase in dollar-level earnings for the S&P 500 for Q1 during the week was $5.6 billion dollars (to $249.3 billion from $243.7 billion), which caused the growth rate to rise to 0.2% from -2.0% over this same period. The companies that reported upside earnings surprises added $6.6 billion in earnings to the total for the quarter, while the companies that reported downside earnings surprises subtracted $1.0 billion in earnings to the total for the quarter, resulting in the net increase of $5.6 billion in earnings for Q1 2014 for the week.

The companies that were the largest contributors to this net increase in dollar-level earnings for the week due to upside EPS surprises were Apple (+$1.2 billion), Gilead Sciences (+$876 million), Microsoft (+$447 million), Travelers (+$276 million), General Motors (+$202 million), and Facebook (+$199 million).

Of the 240 companies that have reported earnings to date for Q1 2014, 73% have reported earnings above the mean estimate and 53% have reported sales above the mean estimate. For Q2 2014, 36 companies have issued negative EPS guidance and 15 companies have issued positive EPS guidance.