FxWirePro: S&P 500 earnings update

So far 55 percent of the companies in S&P 500 have reported their Q3 earnings. Let’s take a look at the key takeaways,

Earnings:

• So far, 76 percent of the companies that reported actual results, reported better than expected earnings, same as last week. Only 24 percent of the companies reported worse than estimated earnings. Average earnings growth rate so far is 4.7 percent, which is higher than 1.7 percent reported last week.
• It was forecasted after the quarter, that growth rate will be 3 percent. Six sectors are reporting higher earnings growth.
• Earnings surprise percentage is at 2.5 percent, which is below the 5-year average.
• At the sector level, the Information Technology (91 percent), Materials (85 percent) sectors have the highest percentages of companies reporting earnings above estimates, while the Telecom (50 percent) sector has the lowest percentage of companies reporting earnings above estimates.
• Insurance companies reported biggest earnings decline due to Hurricanes and Earthquake in Mexico.

Sales:

• 67 percent of the companies reported higher sales than estimated, which is down from 72 percent last week, and 78 percent a week before. Sales growth rate is at 5.7 percent, which is higher than last week’s 5.1 percent.
• At the sector level, the Information Technology (85 percent), and Materials (85 percent) sectors have the highest percentages of companies reporting revenues above estimates, while the Utilities (22 percent) sector has the lowest percentages of companies reporting revenues above estimates.

This week 135 companies are expected to report Q3 results. The current forward 12-month P/E ratio for the S&P 500 is at 17.9, higher than its 5-year average of 15.6 and 10-year average of 14.1

Better than expected earnings in 2017 have pushed all three, S&P 500, Dow Jones Industrial Average, and NASDAQ to all-time highs. S&P 500 is currently trading at 2574, while DOW is at 23328, and NASDAQ at 6629.

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