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S&P 500 Companies Report Record-Breaking Performance vs. Revenue Estimates in Q2

Earnings

By John Butters  |  August 13, 2021

As of today, 91% of the companies in the S&P 500 have reported actual revenue numbers for the second quarter. Of these companies, 87% reported actual revenues above the mean revenue estimate and 13% reported actual revenues below the mean revenue estimate. In aggregate, these companies reported revenues that were 4.9% above expectations. How do these percentages compare to recent averages?

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The percentage of companies that have reported revenues above estimates for Q2 2021 is above both the trailing one-year average (74%) and the trailing five-year average (65%). In fact, the second quarter will mark the highest percentage of S&P 500 companies reporting revenues above estimates for a quarter since FactSet began tracking this metric in 2008. The previous record was 79%, which occurred in Q3 2020. At the sector level, the Health Care (97%), Communication Services (96%) and Information Technology (95%) sectors have the highest percentages of companies reporting revenue above estimates.

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The revenue surprise percentage for Q2 2021 of 4.9% is also above the trailing one-year average (+2.8%) and the trailing five-year average (1.2%). In fact, the second quarter will mark the highest revenue surprise percentage since FactSet began tracking this metric in 2008. The previous record was 3.8%, which occurred in Q1 2021. At the sector level, the Energy (+11.8%), Communication Services (+5.6%), Consumer Staples (+5.3%), and Information Technology (+5.3%) sectors are reporting the largest differences between actual revenues and estimated revenues.

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It is important to note that S&P 500 companies are beating revenue estimates for Q2 that analysts increased during the course of second quarter. On March 31, the estimated revenue growth rate for the S&P 500 for Q2 2021 was 16.6%. By June 30, the estimated revenue growth rate for Q2 had increased to 19.4%, as analysts raised revenue estimates for S&P 500 companies during the quarter. Due to both the unusually high number and magnitude of positive revenue surprises reported by S&P 500 companies during the Q2 earnings season, the revenue growth rate for Q2 is 24.9% today. In fact, the second quarter will mark the highest (year-over-year) revenue growth rate reported by the index since FactSet began tracking this metric in 2008. Please see our recent Insight article for more details.

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Author’s Note: The FactSet Earnings Insight report will not be published on August 20 or August 27. The next edition of the report will be published on September 3.

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Disclaimer: The information contained in this article is not investment advice. FactSet does not endorse or recommend any investments and assumes no liability for any consequence relating directly or indirectly to any action or inaction taken based on the information contained in this article.

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John Butters

Vice President, Senior Earnings Analyst, Investor Relations

Mr. John Butters is Vice President and Senior Earnings Analyst at FactSet. His weekly research report, “Earnings Insight,” provides analysis and commentary on trends in corporate earnings data for the S&P 500 including revisions to estimates, year-over-year growth, performance relative to expectations, and valuations. He is a widely used source for the media and has appeared on CNBC, Fox Business News, and the Business News Network. In addition, he has been cited by numerous print and online publications such as The Wall Street Journal, The Financial Times, The New York Times, MarketWatch, and Yahoo! Finance. Mr. Butters has over 15 years of experience in the financial services industry. Prior to FactSet in January 2011, he worked for more than 10 years at Thomson Reuters (Thomson Financial), most recently as Director of U.S. Earnings Research (2007-2010).

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