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

Written by John Butters | Aug 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?

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.

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.

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.

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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