EC Q4 Earnings Growth Turns Positive

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Earnings growth was expected to resume in the first quarter of 2021 after the pandemic-driven declines of 2020. But positive growth has arrived a little earlier, with earnings in the ongoing Q4 earnings season now modestly above the year-earlier period.

The chart below takes a big-picture view of quarterly earnings and revenue growth for the S&P 500 index that shows actual results for the last four quarters and current consensus estimates for the coming three periods, with 2020 Q4 highlighted in the middle.

To give you a sense of how much the Q4 growth pace has changed in recent weeks and how good the reporting cycle has been, keep in mind that as recently as mid-December 2020, the consensus estimate was for a decline of -11.2%.

Earnings Season Scorecard (as of Friday, February 5th)

The Q4 earnings season has now crossed the half-way mark, with results from 292 S&P 500 members or 58.4% of the index’s total membership out already. Please note that these 292 index members collectively account for 75.6% of the index’s total market capitalization. As such, the results out already represent a true cross-section of the index as a whole and of the overall earnings picture.

We have another busy reporting line-up this week, with more than 450 companies on deck to report Q4 results, including 82 S&P 500 members. This week’s reporters range from legacy blue chips like Disney (DIS - Free Report), Coke (KO - Free Report), and others to up-and-coming bellwethers like Uber (UBER - Free Report), Twitter (TWTR - Free Report), and others.

Total Q4 earnings (or aggregate net income) for these 292 companies are up +4.9% from the same period last year on+2.4% higher revenues, with 80.5% beating EPS estimates and 79.5% beating revenue estimates.

The two sets of comparison charts below put the Q4 results from these 292 index members in a historical context, which should give us a sense how the Q4 earnings season is tracking at this stage relative to other recent periods.

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For an in-depth look at the overall earnings picture and expectations for the coming quarters, please check out our weekly Earnings Trends report  more

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