Sector Earnings Growth in the First Quarter
Friday, May 1, 2009 at 08:11AM More than 70% of the companies in the S&P 500 have now reported first quarter earnings, so the growth puzzle for the quarter is beginning to take shape. Below we highlight the current year over year % change in earnings for Q1 '09 vs. Q1 '08. We also provide the estimates for these numbers as they stood just before earnings season began. As shown, the S&P 500 is currently seeing earnings decline by 32.3% in the first quarter. At the start of earnings season, this number was estimated at -37.4%, so it's coming in a little better than expected. Consumer Discretionary looks the best when comparing actual versus estimates, but earnings have still declined by 52.5% in the sector. The only two sectors that are coming in weaker than expected are Financials and Energy. We also provide the price performance of the sectors since April 2nd. Interestingly, most of the sectors that are up the most are the worst in terms of actual earnings versus estimates.
Reader Comments (1)
Isn't it interesting that the market is trading on the earnings that beat estimates rather than on the earnings reports? I guess they're trading on the new guidance and estimates for Q2 and 2009?
Of course, that guidance is coming from the same folks who under estimated 60% to 62% of Q1 results.
Now, the question becomes, which companies gave accurate guidance for Q1? And what are they guiding for Q2 and beyond?
They have some credibility, after discounting the luck factor.