{"id":4275,"date":"2014-11-05T13:50:16","date_gmt":"2014-11-05T13:50:16","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=4275"},"modified":"2014-11-05T13:50:16","modified_gmt":"2014-11-05T13:50:16","slug":"11-5-14-how-big-of-an-impact-is-energy-having-on-4th-quarter-sp-500-earnings-growth","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=4275","title":{"rendered":"11.5.14: How Big of an Impact is Energy Having on 4th quarter SP 500 Earnings Growth ?"},"content":{"rendered":"

Per Greg Harrison of Thomson Reuters, as of 11\/4\/14, the SP 500’s q4 ’14 year-over-year earnings growth for the key benchmark was projected to be 7.8%.<\/p>\n

If the Energy sector was just flat for q4 ’14, (i.e. no growth), the growth rate for the SP 500 would be +8.6%, so Energy, assuming no growth, is a drag of 80 basis points currently.<\/p>\n

Now, the energy sector isn’t expected to be flat, but is currently expected to see y\/y earnings decline of -6.8%.<\/p>\n

The point is – as you can imagine – is that Energy is a significant drag on the SP 500 earnings as\u00a0a whole.<\/p>\n

As we noted in the Weekly Earnings Update, the “forward 4-quarter” growth rate of the SP 500 is starting to come down, not insignificantly.<\/p>\n

Healthcare, Industrials, Financials and Technology are the sectors to play in lieu of Energy.<\/p>\n

Our own forecast given the numbers, is that Energy estimates will likely bottom in q4 ’14<\/a>, from our October 25th blog. Modeling out the numbers got us to that conclusion. Once we move trough the 2nd half of 2015, compares get easier.<\/p>\n

Boone Pickens noted the\u00a0he thought Energy would bottom in q1 ’15,\u00a0in a CNBC interview yesterday, albeit he likely arrived at the conclusion in a different manner.<\/p>\n

Give the Energy sector time. Values will present themselves.<\/p>\n

The estimates and numbers change every day. We’ll have more on the changes in estimates this weekend.<\/p>\n

Trinity Asset Management, Inc. by:<\/p>\n

Brian Gilmartin, CFA<\/p>\n

Portfolio manager<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

Per Greg Harrison of Thomson Reuters, as of 11\/4\/14, the SP 500’s q4 ’14 year-over-year earnings growth for the key…<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[95,9,98],"tags":[],"class_list":["post-4275","post","type-post","status-publish","format-standard","hentry","category-energy-sector","category-sp-500","category-sector-earnings-growth-estimates"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"post_mailing_queue_ids":[],"_links":{"self":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4275","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4275"}],"version-history":[{"count":2,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4275\/revisions"}],"predecessor-version":[{"id":4277,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/4275\/revisions\/4277"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4275"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4275"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4275"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}