EC What Is Weighing On Macy's (M) And Other Department Store Stocks?

The chart below shows the evolution of Q2 earnings growth expectations in recent weeks.

Expectations for 2019 Q1 as a Whole

Looking at Q1 as a whole, combining the actual results that have come out from the 450 S&P 500 members with estimates for the still-to-come companies, total earnings are expected to be down -0.1% from the same period last year on +5.1% higher revenues.

Driving the expected Q1 earnings decline is broad-based margin pressures across all major sectors, with net margins for the index down 11.4% from 12% in the year-earlier quarter. Net margins are expected to be below the year-earlier period for 9 of the 16 sectors, including the Technology sector (more on Tech margins below).

The table below shows the summary picture for 2019 Q1, contrasted with what was actually achieved in the preceding period.

As you can see above, net margins for the index are expected to be 60 basis points below the year-earlier level, with margins notably weak in the all-important Technology sector, with 2019 Q1 net margins for 19% below the year-earlier period’s 21.2% level.

The chart below shows the sector’s Q1 net margins picture in the context of where margins have come from and where they are expected to go.

The chart below shows earnings and revenue growth expectations for 2019 Q1 (the blended growth picture) contrasted with what we had in the preceding four quarter and what is expected in the following three quarters.

Expectations for 2019 Q2 and the following quarters will evolve further as the remaining companies report Q1 results and provide commentary about ground-level business conditions. We will be keeping a close eye on this revisions trend.

 

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For an in-depth look at the overall earnings picture and expectations for Q1, please check out our weekly Earnings Trends report  more

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