S&P 500 Earnings Season Update: November 3

To date, 81% of the companies in the S&P 500 have reported actual results for Q3 2017. In terms of earnings, more companies (74%) are reporting actual EPS above estimates compared to the five-year average. In aggregate, companies are reporting earnings that are 4.8% above the estimates, which is also above the five-year average. In terms of sales, more companies (66%) are reporting actual sales above estimates compared to the five-year average. In aggregate, companies are reporting sales that are 1.2% above estimates, which is also above the five-year average.

The blended (combines actual results for companies that have reported and estimated results for companies that have yet to report) earnings growth rate for the third quarter is 5.9% today, which is higher than the earnings growth rate of 4.4% last week. Upside earnings surprises reported by companies in multiple sectors (led by the Information Technology sector) were responsible for the increase in the earnings growth rate for the index during the past week. Overall, six sectors are reporting earnings growth, led by the Energy, Information Technology, and Materials sectors. Five sectors are reporting a year-over-year decline in earnings, led by the Financials sector.

The blended sales growth rate for the third quarter is 5.8% today, which is slightly higher than the sales growth rate of 5.6% last week. Upside sales surprises reported by companies in in multiple sectors were responsible for the small increase in the sales growth rate for the index during the past week. Overall, nine sectors are reporting year-over-year growth in revenues, led by the Energy, Materials, and Information Technology sectors. The Utilities and Telecom Services sectors are the only two sectors reporting a year-over-year decline in revenues.

During the upcoming week, 48 S&P 500 companies (including one Dow 30 component) are scheduled to report results for the third quarter.

For Q4 2017, 51 S&P 500 companies have issued negative EPS guidance and 26 S&P 500 companies have issued positive EPS guidance.

The forward 12-month P/E ratio is 18.0, which is above the five-year average and the 10-year average.