Fra factset
Earnings: Fourth Consecutive Quarter of Year-Over-Year Earnings Declines (-6.8%)
The blended earnings decline for Q1 2016 is -6.8%. The first quarter marked the first time the index has seen four consecutive quarters of year-over-year declines in earnings since Q4 2008 through Q3 2009. It also marked the largest year-over-year decline in earnings since Q3 2009 (-15.7%). Four sectors have reported or are reporting yearover-year growth in earnings, led by the Consumer Discretionary and Telecom Service sectors.
Six sectors have reported or are reporting a year-over-year decline in earnings, led by the Energy, Materials, and Financials sectors. Consumer Discretionary: Internet Retail and Auto Manufacturers Lead Growth The Consumer Discretionary sector is reporting the highest earnings growth at 19.5%. At the sub-industry level, 21 of the 31 sub-industries in this sector are reporting or have reported earnings growth for the quarter. Of these 21 subindustries, 14 are reporting or have reported double-digit earnings growth, led by the Internet Retail (143%) and Automobile Manufacturers (101%) sub-industries.
On the other hand, the Department Stores (-48%) sub-industry reported the largest year-over-year decline in earnings at the sub-industry level for the quarter. Telecom Services: AT&T Led Growth The Telecom Services sector reported the second highest earnings growth at 16.6%. Of the five companies in the sector, AT&T was the largest contributor to earnings growth.
The company reported actual EPS of $0.72 for Q1 2016 (which reflects the combination of AT&T and DIRECTV), compared to year-ago EPS (which reflects standalone AT&T) of $0.63. If this company is excluded, the blended earnings growth rate for the Telecom Services sector would fall to 3.4%. Energy: Largest Contributor to Earnings Decline for the S&P 500 The Energy sector is reporting the largest year-over-year decline in earnings (-107.2%) of all ten sectors. The yearover-year decline is larger than -100% because the sector is reporting an aggregate loss (-$927 million) for Q1 2016, compared to year-ago aggregate earnings $12.9 billion.
All six sub-industries in this sector are reporting or have reported a year-over-year drop in earnings: Integrated Oil & Gas (-86%), Oil & Gas Equipment & Services (-77%), Oil EARNINGS INSIGHT May 20, 2016 FactSet.com Copyright © 2016 FactSet Research Systems Inc. All rights reserved. 6 & Gas Drilling (-77%), Oil & Gas Refining & Marketing (-71%), Oil & Gas Storage & Transportation (-20%), and Oil & Gas Exploration & Production (NA). This sector is also the largest contributor to the earnings decline for the S&P 500 as a whole.
If the Energy sector is excluded, the blended earnings decline for the S&P 500 would improve to -1.6% from -6.8%. Materials: Weakness in Metals & Mining The Materials sector reported the second largest year-over-year decline in earnings (-14.4%) of all ten sectors. At the industry level, three of the four industries in the sector reported a year-over-year decrease in earnings, led by the Metals & Mining (-71%) industry. Financials: Broad-Based Weakness
The Financials sector reported the third largest year-over-year decline in earnings (-12.3%) of all ten sectors. At the industry level, five of the seven industries in the sector reported a year-over-year decrease in earnings, led by the Capital Markets (-31%), Insurance (-14%), and Banks (-13%) industries. Revenues: Fifth Consecutive Quarter of Year-Over-Year Revenue Declines (-1.5%) The blended revenue decline for Q1 2016 is -1.5%.
The first quarter marked the first time the index has seen five consecutive quarters of year-over-year declines in sales since FactSet began tracking the data in Q3 2008. Four sectors have reported or are reporting year-over-year growth in revenues, led by the Telecom Services and Health Care sectors. One sector (Financials) reported flat (0%) revenues compared to the year-ago quarter. Five sectors have reported or are reporting a year-over-year decline in revenues, led by the Energy, Utilities, and Materials sectors. Telecom Services: AT&T Led Growth The Telecom Services sector reported the highest revenue growth of all ten sectors at 11.2%.
At the company level, AT&T was the largest contributor to revenue growth for the sector. The company reported actual sales of $40.5 billion for Q1 2016 (which reflects the combination of AT&T and DIRECTV), compared to year-ago sales (which reflects standalone AT&T) of $32.6 billion. If AT&T is excluded, the blended revenue growth rate for the sector would fall to 0.3%. Health Care: Broad-Based Growth The Health Care sector is reporting the second highest revenue growth of all ten sectors at 9.2%. All six industries in this sector are reporting or have reported sales growth for the quarter, led by the Health Care Technology (14%), Biotechnology (12%), and Health Care Providers & Services (10%) industries. Energy: Largest Contributor to Revenue Decline for the S&P 500 The Energy sector is reporting the largest year-over-year decrease in sales (-29.4%) for the quarter.
All six subindustries in the sector are reporting or have reported a year-over-year decrease in revenues: Oil & Gas Equipment & Services (-39%), Oil & Gas Drilling (-37%), Oil & Gas Exploration & Production (-35%), Integrated Oil & Gas (-29%), Oil & Gas Refining & Marketing (-25%), and Oil & Gas Storage & Transportation (-8%). This sector is also the largest contributor to the revenue decline for the S&P 500 as a whole. If the Energy sector is excluded, the blended revenue growth rate for the S&P 500 would jump to 1.4% from -1.5%. Utilities: Broad-Based Weakness The Utilities (-10.4%) sector reported the second largest year-over-year decrease in revenues of all ten sectors.
Four of the five industries in this sector reported a year-over-year decline in sales for the quarter. All four of these industries reported a double-digit decrease in sales: Gas Utilities (-23%), Independent Power & Renewable Electricity Producers (-14%), Multi-Utilities (-10%), and Electric Utilities (-10%). Materials: Weakness in Metals & Mining and Chemicals The Materials (-8.5%) sector reported the third largest year-over-year decrease in revenues of all ten sectors. Two of the four industries in this sector reported a year-over-year decline in sales for the quarter: Metals & Mining (-13%) and Chemicals (-11%). EARNINGS
