Surprise Statistics – S&P 500
The stage was set for Earnings Season 4Q14’s by gloomy guidance back in October after reporting 3Q14. So, it’s no surprise that as of February 6, 71% of the 260 S&P 500 companies reported exceeded their earnings estimates.
Actual earnings beat consensus estimates by 4.2% on average. Over the past 5 years, actual earnings have beat consensus by 6.6% on average. Over the same period, actual earnings have exceeded expectations by as much as 17% and as little as 2%.
55.4% of the 260 companies reported better than expected revenues, beating consensus expectations by 1.5%. Over the past 5 years actual revenues have beat expectations by an average of .6%, revenues beating estimates by as much as 2.8% and as little as -1.2%.
Sector Performance – Earnings
The S&P 500 has 10 sectors, some sectors have reported 71.9% and other sectors have reported 13%. With that disclaimer let’s look at the standout performers.
Information Technology, with stocks comprising 19% of the S&P 500 was expected to report ~9% growth, Actual y-o-y growth was 18.5%, or a 9% SURPRISE in y-o-y EPS.
Materials, with only 3% of the index was expected -1.6% negative growth. Instead the sector has reported 9.2% y-o-y growth, or an 11.1% SURPRISE in y-o-y- EPS.
Consumer Discretionary, with stocks comprising 12% of the index was also expected to contract (-2.4%). Instead the sector grew 3.5%, or a 6.1% SURPRISE in y-o-y.
Sector Performance – Revenues
The sector drill down on revenues shows a few points of interest.
Information Technology expected revenues to grow at 6.9% the actual growth for the sector has been 10% so far.
The Utilities sector was expected to show y-o-y revenue growth of 3.6%, but so far the actual results show 12.2% y-o-y revenue growth. In other words, a revenue surprise of 8.4%
Energy was expected to contract and did. But expectation called for revenues to contract 21.1%. The actual revenue reports show contraction 16.2% or 5% less than expected.
Overall the 4Q14 mid-season checkup yielded positive results. Earnings & revenues were more positive than expected – and above their 5 year averages.