Highest Number of S&P 500 Companies Issuing Negative EPS Guidance Since Q3 2019

As of today, 106 S&P 500 companies have issued EPS guidance for the first quarter. This number is above the 5-year average of 97 and above the 10-year average of 98. Of these 106 companies, 78 have issued negative EPS guidance and 28 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 65. The number of companies issuing positive EPS guidance is below the 5-year average of 39 and below the 10-year average of 33.

In fact, the first quarter has seen the highest number of S&P 500 companies issuing negative EPS guidance for a quarter since Q3 2019 (81). If 78 is the final number for the quarter, it will mark the fourth-highest number of companies in the S&P 500 issuing negative EPS guidance for a quarter since FactSet began tracking this metric in 2006. On the other hand, the first quarter has also seen the lowest number of S&P 500 companies issuing positive EPS guidance for a quarter since Q2 2020 (24).

At the sector level, the Information Technology and Industrials sectors have the highest number of companies issuing negative EPS guidance for the first quarter at 27 and 16, respectively. Combined, these two sectors account for more than half (43) of all the companies in the S&P 500 issuing negative EPS guidance for the first quarter (78).

If 27 is the final number for the Information Technology sector, it will tie the mark with Q3 2022, Q2 2022, and Q3 2019 for the highest number of companies issuing negative EPS guidance in this sector since FactSet began tracking this metric in 2006. At the industry level, the Semiconductors & Semiconductor Equipment industry has the highest number of companies issuing negative EPS guidance in the sector at 11.

If 16 is the final number for the Industrials sector, it will mark the highest number of companies issuing negative EPS guidance in this sector since FactSet began tracking this metric in 2006. At the industry level, the Machinery industry has the highest number of companies issuing negative EPS guidance in the sector at 4.

Given concerns about bank liquidity, one might expect to see more companies in the Financials sector issuing EPS guidance for the first quarter. However, this sector historically has seen few companies provide quarterly EPS guidance. Over the past five years, just one company in the sector on average has issued quarterly EPS guidance. Over the past ten years, only three companies in the sector on average have issued quarterly EPS guidance.

The term “guidance” (or “preannouncement”) is defined as a projection or estimate for EPS (or revenue) provided by a company in advance of the company reporting actual results. Guidance is classified as negative if the estimate (or midpoint of a range estimates) provided by a company is lower than the mean EPS estimate (or revenue 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 (or revenue estimate) the day before the guidance was issued.

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