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Global S&P 500 Companies Reported Higher Earnings Growth in Q1

Earnings

By John Butters  |  May 12, 2017

Coming into the start of the Q1 earnings season, a number of companies with higher global revenue exposure were facing the potential headwind of the stronger U.S. dollar, but also the potential tailwind of higher global GDP growth. Now that more than 90% of S&P 500 companies have reported actuals results for the first quarter, did S&P 500 companies with higher global revenue exposure outperform or underperform S&P 500 companies with lower global revenue exposure in terms of earnings and sales growth for Q1'17?

FactSet GeoRev data (based on the most recently reported fiscal year data for each company in the index) can be used to answer this question. For this particular analysis, the index was divided into two groups: companies that generate more than 50% of sales inside the U.S. (less global exposure) and companies that generate less than 50% of sales inside the U.S. (more global exposure). Aggregate earnings and revenue growth rates were then calculated based on these two groups. 

The Results

The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the S&P 500 for Q1'17 is 13.6%. For companies that generate more than 50% of sales inside the U.S., the blended earnings growth rate is 9.9%. For companies that generate less than 50% of sales inside the U.S., the blended earnings growth rate is 20.9%.

The blended sales growth rate for the S&P 500 for Q1'17 is 7.8%. For companies that generate more than 50% of sales inside the U.S., the blended sales growth rate is 7.1%. For companies that generate less than 50% of sales inside the U.S., the blended sales growth rate is 9.4%.

What drove the outperformance of S&P 500 companies with higher global revenue exposure? At the sector level, the Information Technology and Energy sectors were the largest contributors to earnings and revenue growth in Q1'17 for S&P 500 companies that generate less than 50% of sales inside the U.S.

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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