By Oct. 23, roughly one-quarter of S&P 500 companies had reported, with more beating earnings per share (EPS) forecasts than revenue forecasts even as aggregate earnings stayed modestly above estimates, FactSet data showed.
The share of reporters topping profit forecasts reached 83%, against 66% for revenue, a 17-percentage-point gap. The EPS beat rate was above its five- and 10-year averages of 78% and 77%. Revenue’s rate was below its corresponding averages of 70% and 68%.
The beat rate counts how many companies topped forecasts; the aggregate surprise measures how far reported results exceeded them. Reported earnings were 2.1% above estimates, compared with historical averages of 7.5% over five years and 8% over 10 years. Revenue was 1.2% above estimates, below its five-year average of 1.8% and 10-year average of 1.6%. FactSet calculates those benchmarks from the full index, including companies that had not yet reported.
FactSet’s blended estimate for third-quarter earnings growth reached 29.5% on Oct. 23, compared with 29.0% in its Oct. 16 update and 29.2% on Sept. 30. The measure pairs reported results with estimates for companies yet to report. If the rate holds, it would mark a third consecutive quarter above 25% growth and an eighth straight quarter of double-digit growth.
FactSet said positive EPS surprises across multiple sectors helped lift projected index growth since Sept. 30. A negative surprise in Communication Services and estimate cuts in Health Care partly offset that effect; positive surprises in Financials also contributed.
The reporting season has advanced since EconoTimes’ Oct. 16 S&P 500 earnings update, when 9% of index companies had reported. At that point, 84% of reporters beat EPS estimates and 67% beat revenue forecasts.
FactSet scheduled 179 S&P 500 companies, including 10 Dow components, to report in the coming week.
