No Change in S&P 500 EPS Estimate for Q2 During Month of April

During the month of April, upward and downward revisions to company-level earnings estimates by industry analysts resulted in virtually no change in the aggregate earnings estimate for the S&P 500 for the second quarter. The Q2 bottom-up EPS estimate (which is an aggregation of the median EPS estimates for all the companies in the index) was essentially unchanged (to $38.96 from $38.98) during this period. Is it significant that the bottom-up EPS estimate remained flat (0.0%) during the first month of a quarter? How does this lack of change in the aggregate estimate compare to recent quarters?

On average, the bottom-up EPS estimate usually decreases during the first month of a quarter. During the past five years (20 quarters), the bottom-up EPS estimate has recorded an average decline of 1.8% during the first month of a quarter. During the past 10 years (40 quarters), the bottom-up EPS estimate has recorded an average decline of 2.3% during the first month of a quarter. During the past 15 years (60 quarters), the bottom-up EPS estimate has recorded an average decline of 1.6% during the first month of a quarter.

At the sector level, five sectors recorded an increase in their bottom-up EPS estimate during the first month of the quarter, led by the Energy sector (+5.6%). Six sectors recorded a decrease in their bottom-up EPS estimate during the first month of the quarter, led by the Industrials sector (-2.2%). However, eight sectors recorded a smaller decrease (or an increase) in their bottom-up EPS estimate relative to their five-year average decline and 10-year average decline over the first month of the quarter. Six sectors recorded a smaller decrease (or an increase) in their bottom-up EPS estimate relative to their 15-year average decline for the first month of a quarter.

While the bottom-up EPS estimate for the second quarter remained flat during the month of April, the value of the S&P 500 increased slightly during this same period. From March 31 through April 30, the value of the index increased by 0.3% (to 2648.05 from 2640.87).