More Than 1 in 3 S&P 500 Companies Have Withdrawn EPS Guidance for 2020

During each corporate earnings season, it is not unusual for companies to provide guidance on expected earnings for future quarters or for the full year. However, a number of companies are currently having difficulty providing an estimate for future earnings due to the uncertainty surrounding the negative impacts of COVID-19. Given this difficulty, how many S&P 500 companies have provided EPS guidance for 2020 during the Q1 earnings season? How many S&P 500 companies have withdrawn EPS guidance for 2020 during the Q1 earnings season?

To answer these questions, FactSet searched for comments on annual EPS guidance in the Q1 earnings releases, presentations, and conference call transcripts of the 474 S&P 500 companies that had reported actual results for the first quarter through May 21. Of these 474 companies, 267 (56%) commented on EPS guidance for the current year.

Of these 267 companies, 172 (64%) stated that they were withdrawing or had already withdrawn previous EPS guidance for FY 2020. Nearly all 172 companies cited the uncertainty of the future impacts of COVID-19 as the reason for withdrawing EPS guidance for the full year. At the sector level, the Industrials (35), Consumer Discretionary (31), and Health Care (28) sectors had the highest number of companies withdrawing EPS guidance for the year.

On the other hand, 95 S&P 500 companies provided EPS guidance for FY 2020. Of these 95 companies, 42 provided annual EPS guidance that was lower than the previous guidance issued by the company, 40 maintained previous (annual) EPS guidance, nine provided annual EPS guidance that was higher than the previous guidance issued by the company, and four initiated new EPS guidance (no prior guidance). At the sector level, the Utilities (24) and Health Care (22) sectors had the highest number of companies issuing EPS guidance for the year.

The lack of guidance from such a high number S&P 500 companies adds to the uncertainty around EPS estimates for the full year. On a per-share basis, the bottom-up EPS estimate for CY 2020 is $128.49 today, down from an estimate of $177.81 on December 31. If $128.49 is the final number for the year, it would be the lowest annual EPS reported by the index since CY 2016 ($119.31).

A list of the companies that withdrew and provided 2020 EPS guidance (and their comments) can be found in the full FactSet Earnings Insight report, which can be downloaded at the link below.