S&P 500 Q2 Earnings Season Update: July 21

To date, 19% of the companies in the S&P 500 have reported actual results for Q2 2017. In terms of earnings, more companies (73%) are reporting actual EPS above estimates compared to the 5-year average. In aggregate, companies are reporting earnings that are 7.8% above the estimates, which is also above the 5-year average. In terms of sales, more companies (77%) are reporting actual sales above estimates compared to the 5-year average. In aggregate, companies are reporting sales that are 1.3% above estimates, which is also above the 5-year average.

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 second quarter is 7.2% today, which is higher than the earnings growth rate of 6.8% last week. Upside 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. Overall, nine sectors are reporting or are predicted to report year-over-year earnings growth, led by the Energy, Information Technology, and Financials sectors. Two sectors are reporting or are projected to report a year-over-year decline in earnings, led by the Consumer Discretionary sector.

The blended sales growth rate for the second quarter is 5.0% today, which is equal to the sales growth rate of 5.0% last week.

During the past week, upside sales surprises reported by companies in the Financials sector were mainly offset by downward revisions to sales estimates for companies in the Energy sector, resulting in no change in the revenue growth rate for the index. Overall, 10 sectors are reporting or are projected to report year-over-year growth in revenues, led by the Energy sector. The only sector predicted to report a year-over-year decline in revenues is the Telecom Services sector.

During the upcoming week, 191 S&P 500 companies (including 13 Dow 30 components) are scheduled to report results for the second quarter.

For Q3 2017, seven S&P 500 companies have issued negative EPS guidance and seven S&P 500 companies have issued positive EPS guidance.

The forward 12-month P/E ratio is 17.8, which is above the 5-year average and the 10-year average.