{"id":5315,"date":"2015-11-03T13:58:20","date_gmt":"2015-11-03T13:58:20","guid":{"rendered":"https:\/\/fundamentalis.com\/?p=5315"},"modified":"2015-11-03T13:58:20","modified_gmt":"2015-11-03T13:58:20","slug":"sp-500-earnings-sp-500-ex-energy-both-eps-and-revenue-history-show-stability-and-consistency","status":"publish","type":"post","link":"https:\/\/fundamentalis.com\/?p=5315","title":{"rendered":"SP 500 Earnings: SP 500 Ex-Energy, Both EPS and Revenue History Show Stability and Consistency"},"content":{"rendered":"

In this weekend’s SP 500\u00a0Earnings Update<\/a>, readers were told I’d get the history of the SP 500 from Thomson Reuters on SP 500 earnings growth “ex-Energy” and David Aurelio from Thomson Reuters was kind enough to provide the attached spreadsheet yesterday:<\/p>\n

FC – SP500exEnergy11215<\/a><\/p>\n

The first set of columns is the SP 500 year-over-year total earnings growth, with the Energy sector in the middle column and then the “SP 500 ex-Energy” \u00a0y\/y earnings growth in the third column.<\/p>\n

The second set of columns is the same information for SP 500 revenue growth.<\/p>\n

A couple of trends were somewhat surprising looking at the data:<\/p>\n

1.) In looking at quarter’s where Energy sector earnings growth was positive, the SP 500 ex-Energy y\/y earnings growth still averaged mid-single-digits.<\/p>\n

2.) From mid-2011, through Q3 ’15, excluding distortions from 2009 and then the 2010 compare’s, “average” SP 500 earnings growth ex-Energy is 8.6%.<\/p>\n

3.) If you look at the data from mid-2011, the last 20% SP 500 correction, SP 500 earnings growth was actually pretty robust, as was the Energy sector during that year.<\/p>\n

4.) Revenue growth has been remarkably consistent as well, but gradually slowing from mid to low single-digits.<\/p>\n

5.) Q3 ’15 is the 4th consecutive quarter of slowing earnings growth, but still pretty decent at 6.5%. What kills me is how many pundits were noting that SP 500 earnings growth, ex-Energy, was better-than-10% from Q3 ’14 to Q1 ’15 ? Not too many – at all.<\/p>\n

6.) Revenue growth ex-Energy has slowed for 4 consecutive quarters, but Q3 ’15, assuming that when retailers report during November ’15, do not drag the numbers lower, could see the first acceleration in y\/y revenue growth since mid-2014. (Wal-Mart could have a big influence on Q3 ’15 revenue given their $450 billion full-year revenue estimate for calendar 2015, which will likely disappoint. long WMT)<\/p>\n

Conclusion:<\/strong><\/em> despite the sturm-and-drang of mainstream financial media, SP 500 earnings and revenue have been growing with some consistency and stability post-2009. There has been some slight slowing of late in both core revenue and EPS, but nothing to really worry about in my opinion. Remember, Technology and Financials are 35% of the SP 500 by market cap: it is hard to believe those two sectors en masse, suffer through the kind of bear markets we saw in 2001 – 2002 and then 2008.<\/p>\n

In terms of SP 500 earnings, 2008 and 2009 distorted the data greatly, so investors and data geeks now see a “steady-state” world of stable and consistent earnings growth.<\/p>\n

In 2013, the SP 500 returned 32% for the calendar year, but SP 500 earnings growth was probably close to 10%. That is pretty powerful “P.E expansion”.<\/p>\n

2016 could see something similar, maybe not to the same degree, but I am telling clients to expect a better year for 2016 in terms of both SP 500 returns, and earnings growth.<\/p>\n

After all, 2016 is a Presidential election year.<\/p>\n

(Many thanks to David Aurelio and Greg Harrison of Thomson Reuters for the data.)<\/p>\n","protected":false},"excerpt":{"rendered":"

In this weekend’s SP 500\u00a0Earnings Update, readers were told I’d get the history of the SP 500 from Thomson Reuters…<\/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":[144],"tags":[],"class_list":["post-5315","post","type-post","status-publish","format-standard","hentry","category-standard-poors-earnings-data"],"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\/5315","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=5315"}],"version-history":[{"count":10,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/5315\/revisions"}],"predecessor-version":[{"id":5327,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=\/wp\/v2\/posts\/5315\/revisions\/5327"}],"wp:attachment":[{"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=5315"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=5315"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fundamentalis.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=5315"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}