Subscribe
Featured Image

Highest Number of S&P 500 Companies Issuing Negative EPS Guidance Since Q4 2019

Earnings

By John Butters  |  March 25, 2022

As of today, 95 S&P 500 companies have issued EPS guidance for the first quarter. This number is slightly below the five-year average and 10-year average of 99. Of these 95 companies, 66 have issued negative EPS guidance and 29 have issued positive EPS guidance. The number of companies issuing negative EPS guidance is above the five-year average of 59, but equal to the 10-year average of 66. The number of companies issuing positive EPS guidance is below the five-year average of 40 and below the 10-year average of 33.

Number of Companies Issuing Negative Guidance Increases for a Third Consecutive Quarter

However, the first quarter has seen the highest number of S&P 500 companies issuing negative EPS guidance for a quarter since Q4 2019 (73), and the lowest number of S&P 500 companies issuing positive EPS guidance for a quarter since Q2 2020 (25). In addition, the first quarter marks the third consecutive quarter in which the number of S&P 500 companies issuing negative EPS guidance has increased, and the third consecutive quarter in which the number of S&P 500 companies issuing positive EPS guidance has decreased.

sp-500-negative-eps-guidance-number-companies

sp-500-positive-eps-guidance-number-companies

Sector-Level Trends

At the sector level, the Industrials (+6) and Information Technology (+5) sectors have seen the largest increases in the number of S&P 500 companies issuing negative EPS guidance for Q1 2022 compared to their five-year averages. It is interesting to note that these two sectors also had the highest number of companies cite “supply chain” on earnings calls for Q4.

sp-500-sector-level-negative-eps-guidance

sp-500-sector-level-positive-eps-guidance

Given the recent rise in oil prices and interest rates, one might expect to see more companies in the Energy and Financials sectors issuing positive EPS guidance for the first quarter. However, these two sectors historically have seen few (if any) companies provide 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.

Listen to Earnings Insight on the go! In our weekly Earnings Insight podcast, John Butters provides an update on S&P 500 corporate earnings and related topics based on his popular Earnings Insight publication. The podcast is made available every Monday—listen on Apple podcasts, Spotify, or factset.com.

This blog post is for informational purposes only. The information contained in this blog post is not legal, tax, or investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

Download the latest Earnings Insight

John Butters

Vice President, Senior Earnings Analyst

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).

Comments

The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.