EC Q2 Earnings Season Scorecard

The Q2 earnings season is effectively over, with results from less than 5% of S&P 500 members still awaited, mostly from the Retail sector. Results from the big-box retailers have been strong, though the department stores and specialty operators continued to struggle despite a still-healthy consumer spending environment. 

Total earnings for the 477 S&P 500 members that have reported Q2 results already are up +0.5% on +4.7% higher revenues, with 75.9% beating EPS estimates and 57.4% beating revenue estimates.

Q2 results have largely met expectations, with earnings growth on the weak side and positive EPS beats about in-line with historical trends. Revenue growth has been a lot better compared to earnings, but fewer companies are beating top-line estimates.

For the Retail sector, we now have Q2 results from 78.9% of the retailers in the index. Total earnings for these companies are up +3.6% on +8.3% higher revenues, with 66.7% beating EPS estimates and only 46.7% beating revenue estimates.

For the Technology sector, we now have Q2 results from 94.2% of the sector’s market cap in the index. Total earnings for these Tech companies are down -6.3% on +4.5% higher revenues, with 83.3% beating EPS estimates and 70% beating revenue estimates.

For the Finance sector (all results are in), total earnings are up +4.4% on +8.2% higher revenues, with 77.6% beating EPS estimates and 67.3% beating revenue estimates. The most notable part of Finance’s outperformance has been the favorable momentum on the revenue front.

Estimates for the current period (2019 Q3) have been steadily coming down, with total earnings for the period now expected to be down -4.3% on +4.3% higher revenues.

For the small-cap S&P 600 index, we now have Q2 results from 551 index members or 91.7% of the index’s total membership. Total earnings for these 551 companies are down -10.1% from the same period last year on +2.2% higher revenues, with 60.8% beating EPS estimates and 58.8% beating revenue estimates.

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