Earnings (General News) 02 (Oct 16 - Dec 25)

[winston]

Annualized third-quarter earnings from S&P 500 companies are expected to have risen 1.1 percent, following four quarters of contraction, according to Thomson Reuters I/B/E/S.

Of the 120 companies that have reported so far, 78 percent have beaten analyst expectations, above the long-term average of 63.5 percent.

Source: Reuters

[winston]

The con game continues

As of the end of last week, 78% of the companies that have reported earnings for the most recent quarter have beaten estimates.

That's on about a third of S&P 500 companies that have reported thus far.

Remember, FactSet says on average (the five-year average), 67% of companies in the S&P 500 beat their analyst expectations.

And they beat by an average of 4%. So the numbers in this earnings season are running a little hotter, albeit on a lowered bar.

Source: Forbes

[winston]

Corporate America's earnings recession may have finally ended

by Sam Ro

The Financials sector has been the largest contributor of all eleven sectors to the rise in earnings growth for the index since the end of the third quarter.

This sector accounts for $3.6 billion (or 36%) of the $10.1 billion increase in earnings for the S&P 500 since September 30.”

Source: Yahoo Finance

http://finance.yahoo.com/news/sp-earnin ... 57758.html

[winston]

The bullish earnings story underlying the stock market may be a big lie

by Sam Ro

After five consecutive quarters of decline, earnings growth returned to S&P 500 (^GSPC) companies. The earnings recession ended.

The resumption and acceleration of earnings growth is at the core of most experts’ bullish forecasts for the stock market

GAAP earnings will include a lot of non-recurring or one-time items like asset write-downs and restructuring costs.

These items distort quarterly profits and arguably misrepresent long-term profitability.

And so, a company will also provide an adjusted, or non-GAAP earnings number that excludes what are arguably non-recurring items.

Unfortunately, non-GAAP earnings often reflect a lot of liberties taken by managers aiming to inflate their numbers.

Source: Yahoo Finance

http://finance.yahoo.com/news/sp-500-ea ... 19078.html

[winston]

Earnings Surprises

Last quarter, 71% of earnings beat estimates for the quarter.

And despite the analyst expectations that there would be an overall decline in S&P 500 earnings, the overall earnings reported by companies grew by 3%.

Historically, about 68% of S&P 500 companies' earnings beat estimates.

Source: Forbes

[winston]

4Q 2016

On the data front, small business optimism is running at the highest level in 37 years. And, as we're getting into the heart of earnings seasons, the positive surprises are already coming in bigger and at a hotter pace. That's for the fourth quarter, with just a sliver of post-election certainty priced in.

Add to that, the most troubled industries through the post-financial crisis period have been energy and financials.

Financials now have the tailwind of rising interest rates and an outlook for softer regulation.

Energy companies have spent that past couple of years cutting costs and reducing debt in the oil price crash. With oil back above $50 and with good prospects to go higher as they ramp up production, they will become earnings machines. This is all fuel for hotter earnings and higher stocks.

Plus, on the earnings note, people are just beginning to wake up to the fact that a better growth environment and a dramatic cut in the corporate tax rate will pump up broad market earnings next year--perhaps as much as 15%-20% better than what's already projected for 2017.

Source: Forbes

[winston]

Two Simple Ways to Decipher Earnings Announcements

By Louis Basenese

Heading into the reporting season, analysts expected S&P 500 companies to report a 3.1% increase in earnings. But so far, companies are on track to report a 4.2% increase.

Is it any wonder, then, that the market recently hit new highs?

The average EPS beat rate since 1999 is 62%, according to Bespoke Investment Group. Meanwhile, the average revenue beat rate checks in slightly lower, at 60%.

Source: Wall Street Daily

http://www.thetradingreport.com/2017/02 ... uncements/

[winston]

So far, 411 US S&P 500 companies have reported earnings.

About 74 percent have topped estimates while 52 percent have exceeded sales projections.

Source: The Standard

[winston]

Companies Confuse Investors With Incomplete Quarterly Earnings

By Steve McDonald

Ford’s most recent quarterly announcement was described by analysts as one of the most unclear to date.

Netflix has been described as one of the worst offenders of this kind of confusion. Its recent report was so confused, its stock moved 10% before the news services were even able to report its most recent earnings numbers.

United Technologies added a new level of confusion by reporting earnings in such a way that investors had to do their own math to get to net earnings. No one does that!

The SEC has sent 71 comment letters, wrist slaps for noncompliance, since last May. They’ve gone out to companies like General Electric, Coke, Hertz, Medtronic, Whirlpool, Tesla, Conoco Phillips and many more.

Watch yourselves. As retired investors, we can’t afford major mistakes because of deceptive reporting. Make sure you know which number you’re reading.

Source: The Oxford Club

http://wealthyretirement.com/slap-in-th ... ?src=email

[winston]

US: Q1 Earnings Season Gets Underway

by Sheraz Mian

Total Q1 earnings for the S&P 500 index are expected to be up +6.5% from the same period last year on +6.3% higher revenues.

Q1 estimates came down as the quarter got underway, with the current +6.5% down from +10.4% in late December.

The Energy sector is a big contributor to growth this quarter, with the sector alone accounting for 4 percentage points of the aggregate +6.5% growth.

Technology and Basic Materials are the only sectors with double-digit growth this quarter. Earnings growth is expected to be negative for 6 sectors in Q1, with Transportation having weakest growth of them all at -22.3%.

We have Q1 results from 23 S&P 500 members already (fiscal quarters ending in February). Total earnings for these 23 index members are up +14.5% and their revenues are up +5.1% from the comparable period last year.

The Q1 earnings season has gotten underway already, but it will really get going with the Thursday, April 13th reports from the big banks.

While total earnings for the quarter are expected to be up +6.5% from the same period last year, total revenues are expected to be up +6.3%. As we know, actual growth will be higher than this, which could be as high as the +10.4% growth pace that was expected at year-end 2016.

You would recall that earnings growth reached +7.4% in the preceding quarter, which was the highest growth pace in two years.

Q1 earnings growth will most certainly top what we achieved in 2016 Q4, but the absolute dollar level of Q1 earnings will remain shy of the preceding period’s all-time quarterly record by a big margin.

In other words, Q1 estimates have come down, but they haven’t come down by as much as has historically been the case. We saw this trend of decelerating negative revisions ahead of the preceding earnings season as well, which justifies the market’s favorable view of the overall earnings picture.

At the sector level, 9 of the 16 Zacks sectors are expected to earn more relative to the year-earlier period, with earnings growth for the Technology sector expected to be up +10.7% from the same period last year.

The sector’s strong earnings growth is despite the relatively flattish expectation from Apple (AAPL), with strong growth at Alphabet (GOOGL), Facebook (FB) and easy comparisons at Micron (MU) as big contributors.

Earnings growth for the Finance, and Industrials sectors are expected to be in mid-single digits while the Energy sector moves from a modest loss in the year-earlier period to improving positive earnings this quarter.

If we exclude the Energy sector from the aggregate Q1 earnings tally, earnings growth for the quarter drops to +2.5%.

Estimates have moved up for the Finance sector, but that’s primarily a function of higher interest rates since November 8th.

Source: Zacks

http://finance.yahoo.com/news/q1-earnin ... 09232.html