Second-Highest Number of S&P 500 Companies Issuing Negative EPS Guidance Since Q2 2019

While analysts lowered Q1 earnings estimates for S&P 500 companies by a smaller margin than average, have fewer S&P 500 companies issued negative EPS guidance than average for Q1 as well? The answer is no. Both the number and percentage of S&P 500 companies issuing negative EPS guidance for Q1 2024 are above their recent averages.

Overall, 112 S&P 500 companies have issued quarterly EPS guidance for the first quarter. Of these companies, 79 have issued negative EPS guidance and 33 have issued positive EPS guidance. The number of companies issuing negative EPS guidance is above the 5-year average of 58 and above the 10-year average of 62. In fact, this quarter ties the mark with Q2 2019 and Q1 2016 for the second-highest number of S&P 500 companies issuing negative EPS guidance for a quarter since FactSet began tracking this metric in 2006. The record-high number is 82, which occurred in Q1 2023.

Seven sectors have seen more companies issue negative EPS guidance for Q1 2024 compared to their 5-year averages, led by the Industrials (14.0 vs. 7.7), Information Technology (25.0 vs. 20.4), Consumer Staples (7.0 vs. 2.7), and Health Care (12.0 vs. 8.4) sectors.

The percentage of companies issuing negative EPS guidance is 71% (79 out of 112), which is also above the 5-year average of 59% and above the 10-year average of 63%. This quarter marks the second-highest percentage of S&P 500 companies issuing negative EPS guidance since Q3 2019 (72%), trailing only Q1 2023 (75%).

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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