Technology Revisions Look Strong Over Next 3 Quarters

Per the Thomson Reuters data, here is how the Technology sector’s expected quarterly growth rate has changed over the last few weeks:

Q1 ’17: +14.6% vs +14% as of July 1 ’16

Q4 ’16: +4.7% vs +4.2% as of July 1 ’16

Q3 ’16: +3.2% vs +2.4% as of July 1 ’16

Q2 ’16: +0.7% vs -5.7% as of July 1 ’16

Source: Thomson Reuters ‘This Week in Earnings”


On July 31, this article was posted to this blog talking about Apple’s improving EPs and revenue estimates and then two weeks ago, this blog post was written talking about Tech’s upside surprise and positive revisions for the Q2 ’16.

Today’s article shows how the forward quarter’s for Technology are seeing upward revisions at the time where the rest of the SP 500 sectors are seeing stable expected growth rates or even lower revisions.

The point is expect Technology to continue to see a bid on pullbacks, and readers could even see Tech show good out-performance into year-end given these numbers. (Note how the Tech’s expected growth rates get stronger through Q1 ’17, from almost zero growth as of Q2 ’16.)

How much of the above improvement is Apple EPS and revenue estimates ?

Here is an update to the above Apple spreadsheet showing EPS and revenue estimates for the next three fiscal years as of today, August 16, 2016: FC – Apple816166blog post

I’m trying to get the “Technology ex-Apple” data from Thomson, just to give readers a look at growth rates for both Technology with and without Apple.

I like how Apple’s fiscal 2017 and 2018 EPS and revenue estimates continue to work higher, but I also think Technology as a whole is pretty healthy. (Apple’s fiscal ’16 ends September 30th ’16.)

Apple is a big part of the Technology sector, I would guess close to 15% – 20% of the earnings weight of the sector, but there is more positives happening than just Apple.

EPS and revenue estimates change daily and so can positions, but  given the above – readers should like how Technology is shaping up into year-end ’16.

(Long Apple, overweight Technology)




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