4.26.14: SP 500 Earnings Update: q1 ’14 Earnings +3.3%, Right on Track

Per Thomson Reuters, “This Week in Earnings” the forward 4-quarter estimate for the SP 500 fell $.09 this week to $122.77.

The p.e ratio on the forward estimate as of Friday’s close was 15(x). The PEG slipped this week to under 2, and now sits at 1.98(x).

The earnings yield is 6.59%.

The year-over-year growth rate of the forward estimate rose to 7.68%, up from last week’s 6.75%.

It is very nice to see that increase in the growth rate of the forward estimate: now if we can get it over 8%, we’ll be in good shape.

Given the improvement in the forward growth rate, which sectors saw the biggest change in q1 ’14 earnings growth, versus last week ?

Health Care: +8.7%, vs +4.9% last week;

Industrials: +3.8%, vs +0.6% last week;

Materials: +1.2%, vs -1.2% last week;

Technology: +7.8%, +2.7% last week;

Telco: +18.5%, vs +14.4%

Ute’s: +13.5%, vs +8.2%

SP 500: +3.3%, vs +1.7% last week

Commentary: SP 500’s expected earnings growth almost doubled this past week, with the biggest percentage jump in Technology, as a percentage gain, and also in terms of the importance of Tech’s market cap to the SP 500. Obviously Facebook, and Microsoft helped. (Long both)

We’ve been out and back to Iowa today to see a new client, so we are going to cut the earnings analysis short, and pick up the commentary tomorrow.

q1 ’14 revenue growth is still expected at +2.7% exactly where it started the quarter.

Our forecast was that q1 ’14 earnings growth would come in between 3% – 5%. So far, so good.

Trinity Asset Management, Inc. by:

Brian Gilmartin, CFA

Portfolio manager


Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.