Earnings Season 4Q14 Mid-Season Check-Up

Earnings Season 4Q14

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.

Summary

Overall the 4Q14 mid-season checkup yielded positive results.  Earnings & revenues were more positive than expected – and above their 5 year averages.

For S&P 500 details, this page provides good insight into the Sector & Industry details.  This page has performance data on  Sector SPDR’s and heatmaps

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