Fra Refinitiv:
- 20Q1 earnings are expected to decline 9.0%. Excluding the energy sector, the earnings growth estimate is -7.5%.
- Of the 21 companies in the S&P 500 that have reported earnings to date for 20Q1, 76.2% have reported earnings above analyst estimates. This compares to a long-term average of 64.9% and prior four quarter average of 73.7%.
- 20Q1 revenue is expected to increase 0.7% from 19Q1. Excluding the energy sector, the growth estimate is 1.9%.
- 4% of companies have reported 20Q1 revenue above analyst expectations. This compares to a long-term average of 60.2% and an average over the past four quarters of 58.6%.
- For 20Q1, there have been 88 negative EPS preannouncements issued by S&P 500 corporations compared to 40 positive EPS preannouncements. By dividing 88 by 40 one arrives at an N/P ratio of 2.2 for the S&P 500 Index.
- The forward four-quarter (20Q2– 21Q1) P/E ratio for the S&P 500 is 18.3.
- During the week of Apr. 13, 33 S&P 500 companies are expected to report quarterly earnings.
S&P 500: Q1 2020 SHARE-WEIGHTED EARNINGS ($B)
There has been a decrease in the share-weighted earnings for the S&P 500 since the start of the quarter (to $285.5B from $331.9B). ALL of the eleven sectors have experienced downward revisions to estimates.
Since Feb. 1, the energy (-58.4%) and consumer discretionary (-31.4%) sectors have recorded the highest percentage decreases in earnings, while the utilities (-1.6%) sector has recorded the highest percentage increase in earnings. Overall, share-weighted earnings for the S&P 500 have decreased by 14.0% since the start of the quarter.
Since Feb. 1, the financials (-$12.6B) and energy (-$7.9B) sectors have recorded the highest dollar-level decreases in earnings, while the real estate (-$0.2B) sector has recorded the highest dollar-level increase in earnings. Overall, expected share-weighted earnings for the S&P 500 have decreased by $46.4B since the start of the quarter.
S&P 500: Q1 2020 EARNINGS VS. EXPECTATIONS
| Surprise | Reported | Index | ||||
| Sector | Above % | Match % | Below % | Factor % | Total # | Total # |
| Consumer Discretionary | 83.3% | – | 16.7% | 21.2% | 6 | 62 |
| Consumer Staples | 71.4% | – | 28.6% | 3.5% | 7 | 33 |
| Energy | – | – | – | – | 0 | 27 |
| Financials | – | – | – | – | 0 | 66 |
| Health Care | – | – | – | – | 0 | 60 |
| Industrials | 66.7% | 33.3% | – | 2.8% | 3 | 72 |
| Materials | – | – | – | – | 0 | 28 |
| Real Estate | – | – | – | – | 0 | 31 |
| Information Technology | 80.0% | – | 20.0% | 4.6% | 5 | 71 |
| Communication Services | – | – | – | – | 0 | 22 |
| Utilities | – | – | – | – | 0 | 28 |
| S&P 500 | 76.2% | 4.8% | 19.0% | 6.9% | 21 | 500 |
Source: I/B/E/S data from Refinitiv
Through Apr. 10, 21 companies in the S&P 500 Index have reported earnings for Q1 2020. Of these companies, 76.2% reported earnings above analyst expectations and 19.0% reported earnings below analyst expectations. In a typical quarter (since 1994), 65% of companies beat estimates and 20% miss estimates. Over the past four quarters, 74% of companies beat the estimates and 19% missed estimates.
In aggregate, companies are reporting earnings that are 6.9% above estimates, which compares to a long-term (since 1994) average surprise factor of 3.3% and the average surprise factor over the prior four quarters of 5.2%.
This Week in Earnings provides analysis and commentary on aggregate earnings estimate revisions, growth rates and valuations. 2
Q1 2020: REVENUE SCORECARD
S&P 500: Q1 2020 REVENUE VS. EXPECTATIONS
| Surprise | Reported | Index | ||||
| Sector | Above % | Match % | Below % | Factor % | Total # | Total # |
| Consumer Discretionary | 83.3% | – | 16.7% | 3.5% | 6 | 62 |
| Consumer Staples | 42.9% | – | 57.1% | 1.6% | 7 | 33 |
| Energy | – | – | – | – | 0 | 27 |
| Financials | – | – | – | – | 0 | 66 |
| Health Care | – | – | – | – | 0 | 60 |
| Industrials | 66.7% | – | 33.3% | 3.1% | 3 | 72 |
| Materials | – | – | – | – | 0 | 28 |
| Real Estate | – | – | – | – | 0 | 31 |
| Information Technology | 100.0% | – | – | 0.9% | 5 | 71 |
| Communication Services | – | – | – | – | 0 | 22 |
| Utilities | – | – | – | – | 0 | 28 |
| S&P 500 | 71.4% | – | 28.6% | 2.0% | 21 | 500 |
Source: I/B/E/S data from Refinitiv
Through Apr. 10, 21 companies in the S&P 500 Index have reported revenue for Q1 2020. Of these companies, 71.4% reported revenue above analyst expectations and 28.6% reported revenue below analyst expectations. In a typical quarter (since 2002), 60% of companies beat estimates and 40% miss estimates. Over the past four quarters, 59% of companies beat the estimates and 41% missed estimates.
In aggregate, companies are reporting revenue that are 2.0% above estimates, which compares to a long-term (since 2002) average surprise factor of 1.5% and the average surprise factor over the prior four quarters of 1.1%.
This Week in Earnings provides analysis and commentary on aggregate earnings estimate revisions, growth rates and valuations. 3
S&P 500: Q1 2020 EARNINGS GROWTH
| Earnings $B | Earnings $B | Growth $B | Growth % | |
| Sector | 20Q1 | 19Q1 | 20Q1 | 20Q1 |
| Consumer Discretionary | 17.0 | 24.0 | -7.0 | -29.3% |
| Consumer Staples | 20.5 | 20.3 | 0.1 | 0.7% |
| Energy | 5.6 | 11.1 | -5.5 | -49.6% |
| Financials | 50.8 | 61.0 | -10.2 | -16.8% |
| Health Care | 53.1 | 52.5 | 0.7 | 1.3% |
| Industrials | 20.9 | 30.2 | -9.3 | -30.8% |
| Materials | 6.5 | 7.5 | -1.0 | -13.9% |
| Real Estate | 7.8 | 7.8 | 0.1 | 1.0% |
| Information Technology | 60.4 | 58.9 | 1.5 | 2.5% |
| Communication Services | 31.6 | 29.4 | 2.2 | 7.4% |
| Utilities | 11.4 | 11.1 | 0.2 | 2.2% |
| S&P 500 | 285.5 | 313.8 | -28.3 | -9.0% |
Source: I/B/E/S data from Refinitiv
The estimated earnings growth rate for the S&P 500 for 20Q1 is -9%. If the energy sector is excluded, the growth rate improves to -7.5%. The S&P 500 expects to see share-weighted earnings of $285.5B in 20Q1, compared to shareweighted earnings of $313.8B (based on the year-ago earnings of the current 505 constituents) in 19Q1.
Six of the 11 sectors in the index expect to see an improvement in earnings relative to 19Q1. The communication services and information technology sectors have the highest earnings growth rates for the quarter, while the energy sector has the weakest anticipated growth compared to 19Q1.
The communication services sector has the highest earnings growth rate (7.4%) of any sector. It is expected to earn $31.6B in 20Q1, compared to earnings of $29.4B in 19Q1. Four of the ten sub-industries in the sector are anticipated to see higher earnings than a year ago. The interactive media & services (38.4%) and alternative carriers (2.6%) subindustries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -4.3%.
The information technology sector has the second highest earnings growth rate (2.5%) of any sector. It is expected to earn $60.4B in 20Q1, compared to earnings of $58.9B in 19Q1. Seven of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The semiconductor equipment (24.8%) and systems software (13.2%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -0.7%.
The energy sector has the lowest earnings growth rate (-49.6%) of any sector. It is expected to earn $5.6B in 20Q1, compared to earnings of $11.1B in 19Q1. Three of the six sub-industries in the sector are anticipated to see lower earnings than a year ago. The oil & gas drilling (-90.2%) and integrated oil & gas (-65.8%) sub-industries have the lowest earnings growth in the sector. If these sub-industries are removed, the growth rate improves to -31.1%.
Q2 2020: EARNINGS GROWTH RATES
EXHIBIT 5A. S&P 500: Q2 2020 EARNINGS GROWTH
| Earnings $B | Earnings $B | Growth $B | Growth % | |
| Sector | 20Q2 | 19Q2 | 20Q2 | 20Q2 |
| Consumer Discretionary | 14.7 | 27.1 | -12.4 | -45.7% |
| Consumer Staples | 22.4 | 22.7 | -0.4 | -1.7% |
| Energy | -3.0 | 15.3 | -18.3 | -119.3% |
| Financials | 48.2 | 62.7 | -14.5 | -23.1% |
| Health Care | 53.8 | 56.0 | -2.2 | -3.9% |
| Industrials | 14.7 | 31.5 | -16.7 | -53.1% |
| Materials | 8.1 | 9.9 | -1.8 | -17.8% |
| Real Estate | 7.7 | 7.9 | -0.2 | -2.7% |
| Information Technology | 60.4 | 60.5 | -0.1 | -0.1% |
| Communication Services | 30.1 | 33.4 | -3.3 | -10.0% |
| Utilities | 9.6 | 9.3 | 0.3 | 3.4% |
| S&P 500 | 266.7 | 336.3 | -69.5 | -20.7% |
Source: I/B/E/S data from Refinitiv
The estimated earnings growth rate for the S&P 500 for 20Q2 is -20.7%. If the energy sector is excluded, the growth rate improves to -16.0%. The S&P 500 expects to see share-weighted earnings of $266.7B in 20Q2, compared to share-weighted earnings of $336.3B (based on the year-ago earnings of the current 505 constituents) in 19Q2.
One of the 11 sectors in the index expect to see an improvement in earnings relative to 19Q2. The utilities and information technology sectors have the highest earnings growth rates for the quarter, while the energy sector has the weakest anticipated growth compared to 19Q2.
The utilities sector has the highest earnings growth rate (3.4%) of any sector. It is expected to earn $9.6B in 20Q2, compared to earnings of $9.3B in 19Q2. Four of the five sub-industries in the sector are anticipated to see higher earnings than a year ago. The gas utilities (15.3%) and multi-utilities (12.5%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to 0.2%.
The information technology sector has the second highest earnings growth rate (-0.1%) of any sector. It is expected to earn $60.4B in 20Q2, compared to earnings of $60.5B in 19Q2. Six of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The application software (24.1%) and semiconductor equipment (22.1%) sub-industries have the highest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -1.7%.
The energy sector has the lowest earnings growth rate (-119.3%) of any sector. It is expected to earn $-3.0B in 20Q2, compared to earnings of $15.3B in 19Q2. 5 of the 6 sub-industries in the sector are anticipated to see lower earnings than a year ago. The integrated oil & gas (-152.7%) and oil & gas drilling (-150.5%) sub-industries have the lowest earnings growth in the sector. If these sub-industries are removed, the growth rate declines to -92.6%.
