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Zacks Earnings Trends Highlights: Caterpillar, Deere and NVIDIA
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For Immediate Release
Chicago, IL – September 8, 2017 – Zacks Director of Research Sheraz Mian says, "We are still a few weeks away from the start of the Q3 earnings season, but early indicators are pointing to a continuation of the positive earnings trend that we saw in the last three quarterly reporting cycles."
Favorable Earnings Trend Expected to Continue
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
• We are still a few weeks away from the start of the Q3 earnings season, but early indicators are pointing to a continuation of the positive earnings trend that we saw in the last three quarterly reporting cycles.
• Estimates for Q3 have come down since the quarter got underway, but the magnitude of negative revisions nevertheless compares favorably to other recent periods. In other words, Q3 estimates have come down, but the extent of the decline has been modest relative to other recent comparable periods.
• Total Q3 earnings for the S&P 500 index are expected to be up +4.2% from the same period last year on +5.6% higher revenues. This would follow double-digit earnings growth in each of the preceding two quarters.
• The Q3 earnings growth drops to +2.5% (from +4.2%) when the strong Energy sector growth is excluded from the aggregate picture. Construction, Basic Materials and Conglomerates are the other sectors, in addition to Energy, with double-digit earnings growth in Q3.
• Q3 earnings growth is expected to be in negative territory for 7 of the 16 Zacks sectors, with double-digit declines for the Autos and Aerospace sectors.
• For full-year 2017, total earnings for the S&P 500 index are expected to be up +8.1% on +5% higher revenues, which would follow +0.7% earnings growth on +2.1% higher revenues in 2016. Index earnings are expected to be up +11% in 2018 and +8.8% in 2019.
• Energy growth is expected to turn positive for the small-cap S&P 600 index, with total earnings for the index expected to be up +12.8% from the same period last year on +5.1% higher revenues. This would follow persistent earnings declines for the small-cap index – S&P 600 earnings growth was negative in 3 of the last 4 quarters.
• Strong growth from the Finance, Technology and Energy sectors is driving the small-cap growth. The Finance sector’s role is particularly notable in the small-cap index, with Q3 earnings growth dropping to +1.1% (from +12.8%) on an ex-Finance basis.
The current +4.2% earnings growth estimate has dropped from the +6.3% growth pace expected at the start of the period. This magnitude of decline is about in-line with the revisions trend we saw ahead of the start of the Q2 earnings season and a notable improvement over the trend we have been seeing over the last few years.
Estimates have fallen for 14 of the 16 Zacks sectors, with Energy, and Autos experiencing the most negative revisions. Estimates have gone up for the Technology and Industrial Products sectors, which can be seen in the revisions trend for operators like Caterpillar (CAT - Free Report) – Free Report), Deere & Co. (DE - Free Report) – Free Report), NVIDIA (NVDA - Free Report) – Free Report) and others.
We have one earnings report still to go before (officially) closing the books on the Q2 earnings season, but total earnings in the quarter were up +11.6% on +6.1% higher revenues, the second quarter in a row of double-digit earnings growth for the S&P 500 index (earnings were up +13.5% in Q1). What this means is that the growth pace is steadily decelerating.
Unlike the year-over-year growth pace, the dollar amount of total earnings is expected to remain in record territory.
Please note that the June quarter tally in the chart above was a new all-time quarterly record for the S&P 500 index. But the record isn’t expected to last much longer, with each of the next two quarterly tallies surpassing the preceding period’s record.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs. A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, pleaseclick here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Caterpillar, Deere and NVIDIA
For Immediate Release
Chicago, IL – September 8, 2017 – Zacks Director of Research Sheraz Mian says, "We are still a few weeks away from the start of the Q3 earnings season, but early indicators are pointing to a continuation of the positive earnings trend that we saw in the last three quarterly reporting cycles."
Favorable Earnings Trend Expected to Continue
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
• We are still a few weeks away from the start of the Q3 earnings season, but early indicators are pointing to a continuation of the positive earnings trend that we saw in the last three quarterly reporting cycles.
• Estimates for Q3 have come down since the quarter got underway, but the magnitude of negative revisions nevertheless compares favorably to other recent periods. In other words, Q3 estimates have come down, but the extent of the decline has been modest relative to other recent comparable periods.
• Total Q3 earnings for the S&P 500 index are expected to be up +4.2% from the same period last year on +5.6% higher revenues. This would follow double-digit earnings growth in each of the preceding two quarters.
• The Q3 earnings growth drops to +2.5% (from +4.2%) when the strong Energy sector growth is excluded from the aggregate picture. Construction, Basic Materials and Conglomerates are the other sectors, in addition to Energy, with double-digit earnings growth in Q3.
• Q3 earnings growth is expected to be in negative territory for 7 of the 16 Zacks sectors, with double-digit declines for the Autos and Aerospace sectors.
• For full-year 2017, total earnings for the S&P 500 index are expected to be up +8.1% on +5% higher revenues, which would follow +0.7% earnings growth on +2.1% higher revenues in 2016. Index earnings are expected to be up +11% in 2018 and +8.8% in 2019.
• Energy growth is expected to turn positive for the small-cap S&P 600 index, with total earnings for the index expected to be up +12.8% from the same period last year on +5.1% higher revenues. This would follow persistent earnings declines for the small-cap index – S&P 600 earnings growth was negative in 3 of the last 4 quarters.
• Strong growth from the Finance, Technology and Energy sectors is driving the small-cap growth. The Finance sector’s role is particularly notable in the small-cap index, with Q3 earnings growth dropping to +1.1% (from +12.8%) on an ex-Finance basis.
The current +4.2% earnings growth estimate has dropped from the +6.3% growth pace expected at the start of the period. This magnitude of decline is about in-line with the revisions trend we saw ahead of the start of the Q2 earnings season and a notable improvement over the trend we have been seeing over the last few years.
Estimates have fallen for 14 of the 16 Zacks sectors, with Energy, and Autos experiencing the most negative revisions. Estimates have gone up for the Technology and Industrial Products sectors, which can be seen in the revisions trend for operators like Caterpillar (CAT - Free Report) – Free Report), Deere & Co. (DE - Free Report) – Free Report), NVIDIA (NVDA - Free Report) – Free Report) and others.
We have one earnings report still to go before (officially) closing the books on the Q2 earnings season, but total earnings in the quarter were up +11.6% on +6.1% higher revenues, the second quarter in a row of double-digit earnings growth for the S&P 500 index (earnings were up +13.5% in Q1). What this means is that the growth pace is steadily decelerating.
Unlike the year-over-year growth pace, the dollar amount of total earnings is expected to remain in record territory.
Please note that the June quarter tally in the chart above was a new all-time quarterly record for the S&P 500 index. But the record isn’t expected to last much longer, with each of the next two quarterly tallies surpassing the preceding period’s record.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
More Stock News: 8 Companies Verge on Apple-Like Run
Did you miss Apple's 9X stock explosion after they launched their iPhone in 2007? Now 2017 looks to be a pivotal year to get in on another emerging technology expected to rock the market. Demand could soar from almost nothing to $42 billion by 2025. Reports suggest it could save 10 million lives per decade which could in turn save $200 billion in U.S. healthcare costs.
A bonus Zacks Special Report names this breakthrough and the 8 best stocks to exploit it. Like Apple in 2007, these companies are already strong and coiling for potential mega-gains. Click to see them right now >>
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, please click here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.