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Companies in the S&P 500 have issued fewer negative EPS preannouncements and more positive EPS preannouncements for the third quarter of 2015 relative to the past two quarters. For Q3 2015, 76 companies have issued negative EPS guidance and 32 companies have issued positive EPS guidance. If 76 is the final number for the third quarter, it will mark the lowest number of companies issuing negative EPS preannouncements for a quarter since Q2 2012 (72). If 32 is the final number of companies issuing positive EPS guidance for the third quarter, it will mark the highest number of companies issuing positive EPS guidance since Q4 2012 (34).

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At the sector level, the Information Technology sector has led the positive shift in EPS guidance over the past two quarters. This sector has witnessed not only the largest increase (+6) in the number of companies issuing positive EPS guidance since Q1 2015, but also the largest decline (-6) in the number of companies issuing negative EPS guidance compared to Q1 2015.

For Q3 2015, 19 companies in the Information have issued negative EPS guidance and 12 companies in the Information Technology sector have issued positive EPS guidance. If 19 is the final number for the third quarter, it will mark the lowest number of companies issuing negative EPS preannouncements in this sector for a quarter since Q1 2011 (17). If 12 is the final number of companies issuing positive EPS guidance for the quarter, it will mark the highest number of companies issuing positive EPS guidance in this sector since Q1 2012 (15).

Percentage of Companies Issuing Negative Guidance for Q3 Now Below Five-Year Average

With the positive shift in EPS guidance for Q3, the number of companies issuing negative EPS guidance for Q3 2015 (76) is now below the five-year average (79) for a quarter, while the number of companies issuing positive EPS guidance for Q3 (32) is now slightly above the five-year average (31).

At the sector level, the Health Care (+3) and Information Technology (+2) sectors have recorded the largest increases in the number of companies issuing positive EPS guidance relative to their five-year averages, while the Consumer Discretionary (-2) sector has seen the largest decrease in the number of companies issuing positive EPS guidance relative to its five-year average.

On the other hand, the Utilities (+3), Consumer Discretionary (+2), and Industrials (+2) sectors have witnessed the largest increases in the number of companies issuing negative EPS guidance relative to their five-year averages, while the Information Technology (-4) and Materials (-4) sectors have seen the largest decreases in the number of companies issuing negative EPS guidance relative to their five-year averages.

The percentage of companies issuing negative EPS guidance for Q3 2015 is 70% (76 out of 108), which is slightly below the five-year average for a quarter (72%).

At the sector-level (with a minimum of five companies issuing quarterly EPS guidance), the Consumer Staples (100%) and Industrials (86%) sectors have the highest percentage of companies issuing negative EPS guidance for the third quarter.

FactSet Guidance Quarterly Report

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Senior Earnings Analyst
John’s weekly research report, Earnings Insight provides analysis and commentary on trends in corporate earnings data for the S&P 500, including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, Financial Times, The New York Times, MarketWatch, and Yahoo! Finance.

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