Overall, 110 S&P 500 companies have issued quarterly EPS guidance for the second quarter. Of these companies, 59 have issued negative EPS guidance and 51 have issued positive EPS guidance.
The number of companies issuing negative EPS guidance for the second quarter is above the 5-year average of 57 but below the 10-year average of 62. On the other hand, the number of companies issuing positive EPS guidance for the second quarter is above the 5-year average of 42 and above the 10-year average of 39. As a result, the percentage of companies issuing negative EPS guidance for Q2 is 54% (59 out of 110), which is below the 5-year average of 57% and below the 10-year average of 61%.
What is driving the higher number of S&P 500 companies issuing positive EPS guidance for Q2? At the sector level, the Information Technology sector has the highest number of companies issuing positive EPS guidance of all 11 sectors at 29. This sector also has seen the largest increase in the number of companies issuing negative EPS guidance for Q2 relative to its 5-year average at +8.
The term “guidance” (or “preannouncement”) is defined as a projection or estimate for EPS provided by a company in advance of the company reporting actual results. Guidance is classified as negative if the estimate (or mid-point of a range estimates) provided by a company is lower than the mean EPS 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 the day before the guidance was issued.
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