Including this morning's reports, we now have Q3 results from 307 S&P 500 members that combined account for 68.9% of the index’s total market capitalization. Total earnings for these companies are up +1.8% from the same period last year on -1.7% lower revenues, with 71.4% beating EPS estimates and 42.9% coming ahead of revenue estimates. This is weaker performance relative to other recent periods from the same group of 307 index members, with the revenue weakness particularly notable as a majority of companies are unable to beat the lowered revenue estimates.   

At the sector level, results are positive from the Technology and Medical sectors and very weak from the Energy, Industrials and Basic Material sectors. Most of the Retail sector results are still to come, but what we have seen thus far from the sector are encouraging, though most of the sector results at this stage have come from the online operators and restaurant players.   

The composite or blended picture for Q3, combining the actual results from the 307 companies that have reported results with estimates for the still-to-come 193 S&P 500 index members, is for earnings to decline -2.6% from the same period last year on -3.8% lower revenues. The Energy sector remains a big drag on growth, with earnings for the sector expected to be down -63.9% from the same period last year on -36.3 lower revenues. Excluding Energy, total Q3 earnings for the index would be up +4.7% from the same period last year on +1.3% higher revenues.   

A combination of global growth worries and the strong U.S. dollar have been prompting management teams to provide weak guidance for the current period. This is causing Q4 estimates to come down at an accelerated pace. In some respects, the magnitude of negative revisions to Q4 estimates is tracking above the comparable periods in the last two reporting periods.