Markets: Letís have a look at companiesí results so far

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10/30/2018 | 04:45 pm
On October 30, as we write this piece, half of the companies in the S&P 500 have released their figures. Itís time to have a first assessment.

Given the current environment, with the S&P 500 ending most of Octoberís sessions in the red, itís easy to think that the third quarter earnings season has been a bleak one. Disappointing results from technology giants such as Amazon and Alphabet have only reinforced that feeling. 

But nothing could be furthest from the truth. So far, it has actually been one of the best earnings seasons in years. Of all the S&P 500 companies that have already reported their results, 77% have reported a positive EPS surprise and 59% have reported a positive sales surprise, according to financial research company FactSet, which publishes a weekly review of quarterly reports (which is also freely available on its website).

Source : Fact Set

Due to these positive EPS surprises, the earnings growth rate for the S&P 500 now reaches 22.5%. ďIf 22.5% is the actual growth rate for the quarter, it will mark the third highest earnings growth since Q3 2010Ē, the report states.

For Q4 2018, 63% of S&P 500 companies have issued negative EPS guidance and 15 S&P 500 companies have issued positive EPS guidance. This percentage is below the 5-year average of 70%.

However, as shown in the table below made by FactSet, all sectors are not fairing as well. Energy is 40% lower than earnings expectations, while Info Technology is 96 % above.


Source : Fact Set

We take this opportunity to remind you that hunt for companies whose prospects are being raised by the market provides a good investment base. By integrating other financial parameters, it is possible to create very efficient value selections. The problem is that finding all these data and comparing them is very complicated. Come on, it's a joke, just use our Stock Screener.
Romain Fournier
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