54% Fewer S&P 500 Companies Issuing EPS Guidance for Q2 Than Average

As of today, more than one third of S&P 500 companies (183) have withdrawn EPS guidance for CY 2020. Most of these companies cited uncertainty around the impact of COVID-19 as the reason for not providing annual EPS guidance. Given the smaller number of companies issuing EPS guidance for the year, are fewer S&P 500 companies issuing EPS guidance for the second quarter as well?

The answer is yes. To date, 49 S&P 500 companies have issued EPS guidance for Q2 2020, which is 53.8% below the five-year average of 106. In fact, if 49 is the final number for the quarter, it will mark the lowest number of S&P 500 companies issuing EPS guidance for a quarter since FactSet began tracking this data in 2006. The current record is 63, which occurred in Q2 2009.

Of the 49 companies that have issued EPS guidance for Q2 2020, 22 have issued positive EPS guidance and 27 have issued negative EPS guidance. The number of companies issuing positive EPS guidance for Q2 2020 (22) is 33.3% below the five-year average of 33.0, while the number of companies issuing negative EPS guidance for Q2 2020 (27) is 63.1% below the five-year average of 73.1. Therefore, there has been a much larger decline in the number of companies issuing negative EPS guidance for Q2 relative to the five-year average compared to positive EPS guidance for Q2.

At the sector level, nine of the 11 sectors have seen fewer companies issue negative EPS guidance for Q2 2020 relative to their five-year averages. However, the Consumer Discretionary, Health Care, and Industrials sectors have witnessed the largest decreases in the number of companies issuing negative EPS guidance for Q2 compared to their five-year averages. In the Consumer Discretionary sector, no companies (0) have issued negative EPS guidance for Q2 2020, which is below the five-year average of 16.4. In the Health Care sector, four companies have issued negative EPS guidance for Q2 2020, which is below the five-year average of 11.4. In the Industrials sector, two companies have issued negative EPS guidance for Q2 2020, which is below the five-year average of 8.8. It is interesting to note that the Consumer Discretionary, Industrials, and Health Care sectors rank first, second, and third out of all 11 sectors in terms of the highest number of S&P 500 companies that have withdrawn EPS guidance for CY 2020.

Thus, it appears the uncertainty around the impact of COVID-19 is causing many S&P 500 companies to not provide short-term EPS guidance as well as long-term EPS guidance at this point in time.

The term “guidance” (or “preannouncement”) is defined as a projection or estimate for EPS provided by a company in advance of the company reporting actual results. Guidance is classified as negative if the estimate (or mid-point of a range estimates) provided by a company is lower than the mean EPS estimate the day before the guidance was issued. Guidance is classified as positive if the estimate (or mid-point of a range of estimates) provided by the company is higher than the mean EPS estimate the day before the guidance was issued.

A list of the S&P 500 companies that have withdrawn EPS guidance for CY 2020 can be found in the full FactSet Earnings Insight report, which can be downloaded at the link below.