Second Highest Number of S&P 500 Companies Issuing Positive EPS Guidance for Q2 Since 2006

Heading into the peak weeks of the second quarter earnings season, 109 S&P 500 companies have issued EPS guidance for the second quarter. Of these 109 companies, 62 have issued negative EPS guidance and 47 companies have issued positive EPS guidance. The number of companies issuing negative EPS is below the five-year average (78), while the number of companies issuing positive EPS guidance is well above the five-year average (30).

If 47 is the final number of S&P 500 companies issuing positive EPS guidance for the quarter, it will mark a tie with Q2 2010 for the second 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 53, which was set in the previous quarter (Q1 2018).

What is driving the positive sentiment in EPS guidance for the second quarter? At the sector level, the Information Technology and Health Care sectors have the highest number of companies issuing positive EPS guidance for the quarter. Combined, these two sectors account for 31 of the 47 S&P 500 companies (or 66%) that have issued positive EPS guidance for the quarter.

Sector-Level Analysis

In the Information Technology sector, 20 companies have issued positive EPS guidance for the second quarter. This number is above the five-year average for the sector (12). If 20 is the final number for the quarter, it will mark the third highest number of companies issuing positive EPS guidance for this sector since FactSet began tracking EPS guidance in 2006. Eight of these 20 companies are in the Semiconductor & Semiconductor Equipment industry. This industry is projected to report the second highest earnings growth (38%) of the seven industries in this sector.

In the Health Care sector, 11 companies have issued positive EPS guidance for the second quarter. This number is above the five-year average for the sector (five). If 11 is the final number for the quarter, it will mark a tie with Q2 2017 and Q3 2017 for the highest number of companies issuing positive EPS guidance for this sector since FactSet began tracking EPS guidance in 2006. Five of these 11 companies are in the Health Care Equipment & Supplies industry. This industry is projected to report the fourth highest earnings growth (10%) of the six industries in this sector.