{"id":5308,"date":"2015-10-31T18:48:16","date_gmt":"2015-10-31T18:48:16","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=5308"},"modified":"2015-10-31T18:48:16","modified_gmt":"2015-10-31T18:48:16","slug":"october-15s-sp-500-earnings-results-ex-energy-sp-500-earnings-growth-5-6-for-q3-15","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=5308","title":{"rendered":"October &#8217;15&#8217;s SP 500 Earnings Results: Ex-Energy, SP 500 Earnings Growth 5% &#8211; 6% for Q3 &#8217;15"},"content":{"rendered":"<p>Using Factset&#8217;s Weekly Earnings Insight, Ex-Energy, SP 500 earnings are +5% &#8211; 6% for Q3 &#8217;15, probably slightly slower than the first and 2nd quarter&#8217;s of 2015.<\/p>\n<p>Ex-Energy, SP 500 revenue has grown +2.2% y\/y, with retail or Consumer Discretionary set to report in November &#8217;15. Financials, Technology and Energy have pretty much all reported Q3 &#8217;15 earnings.<\/p>\n<p>A couple statistics jumped out during the typical Saturday mornings SP 500 earnings reads:<\/p>\n<ul>\n<li>Per Factset, the revision for Q4 &#8217;15&#8217;s bottom-up estimate is -2.4%, lower than 1-year average but higher than the 5 &amp; 10-year averages. In English, what that means is looking ahead to Q4 &#8217;15, the bottom up estimate has been revised 2.4% lower since October 1 &#8217;15, and looks to be inline with the longer-term averages, i.e. investors are seeing the normal rate of negative revisions for the next forward quarter (or Q4 &#8217;15) as it stands today.<\/li>\n<li>Also per Factset, Health Care has the highest number of companies beating EPS consensus at 86%, as well the highest percentage of companies beating revenue consensus at 69%.<\/li>\n<li>Per Thomson Reuters, SP 500 earnings are expected to grow at 6.3% in Q3 &#8217;15, which Thomson calls &#8220;the lowest Ex-Energy growth rate in over two years&#8221;. ( Readers need to see the data on this &#8211; give me a few days.)<\/li>\n<li>Per Bespoke, in terms of the market action since the September &#8217;15 lows, the biggest surprise I see is that &#8220;international companies&#8221; or companies with greater than 50% of their revenue from outside the US, &#8220;have outperformed domestic names significantly&#8221; during this rally.<\/li>\n<li>Bullish sentiment has suddenly spiked higher, and it has remained stubbornly below average for a while. Part of the spike could be due to the plethora of articles about the SP 500&#8217;s &#8220;seasonal&#8221; returns beginning November 1 of each year.<\/li>\n<\/ul>\n<p><em><strong>Analysis \/ conclusion: <\/strong><\/em>Core SP 500 earnings growth Ex-Energy is still growing at a mid-single-digit pace, but slowing somewhat. What is the catalyst that will accelerate SP 500 earnings growth ? Hard to say. I think it will be SP 500 corporate boards and leadership growing more positive about the future. There is no question that SP 500 earnings growth is locked in this &#8220;slow, stable, mid to high-single-digit, year-over-year growth&#8221; range, quarter-in, quarter out, which despite the headlines and negative earnings pessimism, continues unabated.<\/p>\n<p>One statistic readers might like: updating my Apple (AAPL) spreadsheet with current EPS and revenue Street consensus after Apple&#8217;s fiscal Q4 &#8217;15 earnings report, the &#8220;average&#8221; EPS and revenue growth rate over the next 3 years (fiscal &#8217;16 &#8211; &#8217;18) is 9% and 5% respectively. Expectations for Apple&#8217;s forward growth have been ratcheted WAY down, which is highly unusual for a leadership stock like that. AAPL may now be a &#8220;growth cyclical&#8221; similar to that of the tech giants of the late 1990&#8217;s.<\/p>\n<p><em><strong>Thomson Reuters data for SP 500 earnings (By the Numbers):\u00a0<\/strong><\/em><\/p>\n<ul>\n<li>Forward 4-quarter estimate for SP 500: $124.32<\/li>\n<li>Forward estimate of P.E ratio: 16.7(x)<\/li>\n<li>PEG ratio: still negative given y\/y growth rate<\/li>\n<li>SP 500 earnings yield: 5.98%, versus last week&#8217;s 5.99%<\/li>\n<li>Forward estimate y\/y growth rate: -2.09% vs last week&#8217;s -1.88%. The expectation is that this will turn positive in November &#8217;15. Not yet though.<\/li>\n<\/ul>\n<p>The PEG ratio using core SP 500 earnings growth is closer to 2.5(x).<\/p>\n<p>Despite the bleating of mainstream media, SP 500 earnings are rolling along about as usual, but the year-over-year growth rate is trending slightly lower.<\/p>\n<p>The SP 500 is now overbought. A 200 point down day for the Dow 30 would take a lot of fluff out of the market.<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Using Factset&#8217;s Weekly Earnings Insight, Ex-Energy, SP 500 earnings are +5% &#8211; 6% for Q3 &#8217;15, probably slightly slower than&hellip;<\/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":[90,91],"tags":[],"class_list":["post-5308","post","type-post","status-publish","format-standard","hentry","category-apple-aapl","category-weekly-earnings-update"],"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\/5308","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=5308"}],"version-history":[{"count":6,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/5308\/revisions"}],"predecessor-version":[{"id":5314,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/5308\/revisions\/5314"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5308"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5308"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5308"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}