Are More S&P 500 Companies Issuing Negative EPS Guidance Than Average for Q4?

While analysts are revising earnings estimates down by a larger margin for Q4 relative to recent averages, are more S&P 500 companies issuing negative EPS guidance than average for Q4 as well?

Overall, 100 S&P 500 companies have issued quarterly EPS guidance for the fourth quarter, which is above the 5-year average of 97 and above the 10-year average of 98.

Of these companies, 65 have issued negative EPS guidance and 35 have issued positive EPS guidance.

The number of companies issuing negative EPS guidance is above the 5-year average of 57, but equal to the 10-year average of 65. This number is also nearly equal to the 66 recorded in Q3 2022. Relative to the previous quarter, the Real Estate (+4) and Industrials (+3) sectors have seen the largest increases in the number of companies issuing negative EPS guidance, while the Information Technology (-5) and Consumer Discretionary (-3) sectors have seen the largest decreases in the number of companies issuing negative EPS guidance.

On the other hand, the number of companies issuing positive EPS guidance is below the 5-year average of 39, but above the 10-year average of 33. This number is also below the 42 recorded in Q3 2022. Relative to the previous quarter, the Real Estate (-5) sector has seen the largest decrease in the number of companies issuing positive EPS (FFO) guidance.

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

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