FactSet put third-quarter S&P 500 earnings growth at 29% on Oct. 16, down from 29.4% a week earlier, as early reporters frequently beat EPS estimates but combined earnings upside remained modest.
Only 9% of index members had reported by Oct. 16. Within that early cohort, 84% beat EPS estimates, above the five-year and 10-year benchmarks of 78% and 77%.
Although EPS beats were common, the aggregate earnings upside was 2.6%, well below the five-year average of 7.5% and 10-year average of 8%. Revenue beats were closer to typical: 67% of reporters topped estimates, versus historical rates of 70% and 68%.
The beat rate counts how many companies exceed forecasts, while the surprise figure measures how far reported earnings as a group came in above estimates. The two measures show why a high share of companies can beat expectations even when the overall amount above forecasts is relatively small.
Since Sept. 30, technology EPS beats helped shape the change in projected index growth. Health care estimate cuts were the main drag, partly offset by energy increases; in financials, mixed EPS surprises left projected growth unchanged.
FactSet’s blended estimate for S&P 500 third-quarter earnings growth stood at 29% on Oct. 16, down from 29.4% a week earlier. FactSet combines actual earnings from reporting companies with estimates for the rest of the index. If the 29% estimate holds, it would mark a third consecutive quarter above 25% growth and an eighth straight quarter of double-digit growth, FactSet said.
FactSet expected another 79 S&P 500 companies to report third-quarter results over the following week; five were Dow 30 components.
