EC A Positive & Reassuring Earnings Picture In Q1

Looking at Q1 as whole, combining the actual results from the 412 S&P 500 members that have come out with estimates for the still-to-come 88 index members, total earnings are expected to be up +12.7% from the same period last year on +6.2% higher revenues. This would follow +7.4% earnings growth in 2016 Q4 on +4.7%.

The table below shows the summary picture for Q1, contrasted with what was actually achieved in Q4.

Please note that the Q1 earnings season follows the strong showing on the earnings front in the preceding reporting cycle. Not only did 2016 Q4 growth reach the highest in two years, but total earnings for the quarter also reached a new quarterly record. The strong Q4 performance came after the first positive earnings growth in 2016 Q3, having declined in each of the preceding 5 quarters. The strong Q1 showing represents a notable acceleration in the growth momentum.

The chart below shows the Q1 earnings growth contrasted with what is expected in the following three quarters and actual results in the preceding 5 quarters. As you can see in the chart below, this growth pace is expected to continue through the rest of the year.

Please note that the earnings backdrop has not changed in any meaningful way since the November elections, notwithstanding the market’s strong gains since then.
 

Here is a list of the 712 companies including 43 S&P 500 members reporting this week.

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Note: Sheraz Mian regularly provides earnings analysis on Zacks.com and appears frequently in the print and electronic media. In addition to this Earnings Preview ...

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