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

Written by John Butters | Jan 12, 2024

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

The answer is yes. Both the number and percentage of S&P 500 companies issuing negative EPS guidance for Q4 2023 are above their 5-year and 10-year averages.

Overall, 111 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 111 companies, 72 have issued negative EPS guidance and 39 have issued positive EPS guidance. The number of companies issuing negative EPS guidance is above the 5-year average of 57 and above the 10-year average of 62. On the other hand, the number of companies issuing positive EPS guidance is below the 5-year average of 40, but above the 10-year average of 36.

The percentage of companies issuing negative EPS guidance is 65% (72 out of 111), which is above the 5-year average of 59% and above the 10-year average of 63%.

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.

 

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