Record-High Number of S&P 500 Companies Issuing Positive EPS Guidance for Q4

Heading into the peak weeks of the fourth quarter earnings season, 85 S&P 500 companies have issued EPS guidance for the quarter. This number is below the five-year average of 102. Of these 85 companies, 29 have issued negative EPS guidance and 56 have issued positive EPS guidance. The number of companies issuing negative EPS is below the five-year average (68), while the number of companies issuing positive EPS guidance is above the five-year average (34).

If 56 is the final number of S&P 500 companies issuing positive EPS guidance for the quarter, it will mark the highest number of S&P 500 companies issuing positive EPS guidance for a quarter since FactSet began tracking this data in 2006. The current record for the highest number of S&P 500 companies issuing positive EPS guidance for a quarter is 51, which was occurred in Q1 2018.

What is driving the positive EPS guidance for the fourth quarter? At the sector level, the Information Technology and Industrials sectors have the highest number of companies issuing positive EPS guidance for the quarter.

In the Information Technology sector, 29 companies have issued positive EPS guidance for the fourth quarter. This number is well above the five-year average for the sector (16). If 29 is the final number for the quarter, it will mark the highest number of companies issuing positive EPS guidance for this sector since FactSet began tracking EPS guidance in 2006. Eleven of these 29 companies are in the Semiconductor & Semiconductor Equipment industry.

In the Industrials sector, nine companies have issued positive EPS guidance for the fourth quarter. This number is well above the five-year average for the sector (three). If nine is the final number for the quarter, it will also mark the highest number of companies issuing positive EPS guidance for this sector since FactSet began tracking EPS guidance in 2006.

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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