To date, 66% of the companies in the S&P 500 have reported actual results for Q4 2018. In terms of earnings, the percentage of companies reporting actual EPS above estimates (71%) is equal to the five-year average. In aggregate, companies are reporting earnings that are 4.0% above the estimates, which is below the five-year average. In terms of revenues, the percentage of companies reporting actual revenues above estimates (62%) is above the five-year average. In aggregate, companies are reporting revenues that are 1.2% above the estimates, which is also above the five-year average.
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 fourth quarter is 13.3% today, which is above the earnings growth rate of 12.0% last week. Positive earnings surprises reported companies in the Communication Services and Energy sectors were mainly responsible for the increase in the earnings growth rate during the week. If 13.3% is the actual growth rate for the quarter, it will mark the first time the index has not reported earnings growth above 20% since Q4 2017. However, it will also mark the fifth straight quarter of double-digit earnings growth for the index. Ten of the 11 sectors are reporting year-over-year earnings growth. Five sectors are reporting double-digit earnings growth, led by the Energy, Communication Services, and Industrials sectors.
The blended, year-over-year revenue growth rate for the fourth quarter is 7.0% today, which is above the revenue growth rate of 6.7% last week. Positive revenue surprises reported by companies in multiple sectors were responsible for the increase in the revenue growth rate during the week. All 11 sectors are reporting year-over-year growth in revenues. Three sectors are reporting double-digit growth in revenues: Communications Services, Energy, and Real Estate.
Looking ahead, analysts predict a decline in earnings for the first quarter of 2019 and low single-digit growth in earnings for the second and third quarters of 2019.
The forward 12-month P/E ratio is 15.8, which is below the five-year average but above the 10-year average.
During the upcoming week, 65 S&P 500 companies (including 2 Dow 30 components) are scheduled to report results for the fourth quarter.