S&P 500 Earnings Season Update: April 20, 2018

To date, 17% of the companies in the S&P 500 have reported actual results for Q1 2018. In terms of earnings, more companies are reporting actual EPS above estimates (80%) compared to the 5-year average. In aggregate, companies are reporting earnings that are 5.9% above the estimates, which is also above the five-year average. In terms of sales, more companies (72%) are reporting actual sales above estimates compared to the five-year average. In aggregate, companies are reporting sales that are 1.6% above estimates, which is also above the five-year average.

Sector-Level Breakdown

The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) year-over-year earnings growth rate for the first quarter is 18.3% today, which is higher than the earnings growth rate of 17.4% last week. Positive earnings surprises reported by companies in the Financials sector were mainly responsible for the increase in the earnings growth rate for the index during the past week. All 11 sectors are reporting or are predicted to report year-over-year earnings growth. Seven sectors are reporting or are expected to report double-digit earnings growth, led by the Energy, Materials, Financials, and Information Technology sectors.

The blended, year-over-year sales growth rate for the third quarter is 7.6% today, which is slightly higher than the growth rate of 7.5% last week. Positive revenue surprises reported by companies in the Financials sector were mainly responsible for the small increase in the revenue growth rate for the index during the past week. All eleven sectors are reporting or are projected to report year-over-year growth in revenues. Three sectors are reporting double-digit growth in revenues: Energy, Materials, and Information Technology.

As of today, all 11 sectors are reporting or are expected to report both earnings and revenue growth for the second straight quarter.

Looking at future quarters, analysts currently project earnings growth to continue at double-digit levels through 2018.

The forward 12-month P/E ratio is 16.6, which is above both the five- and 10-year averages.

During the upcoming week, 179 S&P 500 companies (including 12 Dow 30 components) are scheduled to report results for the first quarter.

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