Q3 Earnings Growth and Q4 Estimates

The estimates for the year-over-year change in Q3 earnings at the start of earnings season were -23.2% for the S&P 500.  Currently, the actual number sits at -17.2% for the S&P 500 with less than 20% of the index left to report.  As shown below, the Financial sector has seen its earnings grow by 358.8% in Q3 '09 versus Q3 '08!  Given how bad things were last year, it's not surprising to see a reading this high, but it is a sign that things have gotten much better.  Health Care, Utilities, and Consumer Staples (all non-cyclical) are the only other sectors that have seen year-over-year earnings growth this quarter.  Energy has seen the biggest decline in earnings at -62.9%, followed by Materials (-43.4%), Industrials (-37.3%), and Consumer Discretionary (-29.3%).

The Financial sector is currently expected to see growth of 133.8% in Q4 '09 versus Q4 '08.  This high estimate in the Financial sector helps put estimates for the entire S&P 500 at +65.2% in the fourth quarter.  Ex-Financials, the S&P 500 is expected to see Q4 earnings actually decline by 7.6%.  Technology is expected to see growth of 21.5% in Q4, while estimates for the Materials sector are currently at 97.5%.

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