11.8.14: SP 500 Revenue Growth, 3rd and 4th Quarters

We occasionally post an update to SP 500 revenue growth, which we are doing tonight again here (FCSP500revgro(qtrly)).

As you can see SP 500 revenue growth for q3 ’14 is coming in slightly better for the 3rd quarter with almost 80% of the SP 500 having reported their 3rd quarter, 2014 results.

The two sectors with upside in terms of revenue growth are Healthcare (no surprise, a lot of which is biotech), and Technology.

In terms of the 4th quarter expectations, Thomson Reuters doesn’t give any look forward for revenues as they do with earnings, but Factset does, so here is what Factset is showing for the changes in q4 ’14 revenue expectations, from Sept 30th to Friday, November 7th (first column of data), as ranked from highest to lowest expected revenue growth:

Health Care: +9.2%, vs the +8.8% expected of 9/30/14

Technology: +6%, vs +7.2%

Telecom: +4%, vs +4.2%

Consumer Disc: +3.5%, vs +4.7%

Consumer Spls: +3.2%, vs +3.8%

Industrials: +2.8%, +3.3%

Ute’s: +2.5%, vs +0.8%

Fincl’s: +2.3%, +2.9%

SP 500: +2.2%, vs +3.8%

Basic Materials: -0.6%, vs +1.9%

Energy: -9%, vs. -1.7%

Only Healthcare has seen upward revisions to revenue estimates for q4 ’14. What a shocker that Basic Materials and Energy are at the bottom of the list. Every sector besides Healthcare has seen revenue growth estimates decline for q4 ’14.

My guess is, as was the case with yesterday’s Weekly Earnings Update, (see November 7th post), is that Energy is having a significant drag on q4 ’14 SP 500 revenue estimates as well, not just SP 500 earnings estimates.

The expected revenue decline of 9% within the Energy sector for q4 ’14 as of this weekend, is 400% greater than the expected revenue decline as of September 30th’s expected -1.7% and it could still get worse.


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