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Zacks Earnings Trends Highlights: Alcoa, Oracle, Adobe, General Mills
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For Immediate Release
Chicago, IL – September 28, 2017 – Zacks Director of Research Sheraz Mian says, “Total Q3 earnings for the S&P 500 index are expected to be up +3.2% from the same period last year on +5% higher revenues.”
Start of Q3 Earnings Season
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:
• The Q3 earnings season wouldn’t take the spotlight for a couple of more weeks, but the earnings season has officially gotten underway already as companies with fiscal quarters ending in August have started reporting results.
• Total Q3 earnings for the S&P 500 index are expected to be up +3.2% from the same period last year on +5% higher revenues. This would follow double-digit earnings growth in each of the preceding two quarters.
• As has been the trend in recent years, estimates for Q3 have come down since the quarter got underway, but the magnitude of negative revisions compares favorably to other recent periods.
• Earnings growth for Q3 drops to +1.3% (from +3.2%) when the strong Energy sector contribution is excluded from the aggregate picture. The Conglomerates sector is the only other sector, in addition to Energy, with double-digit earnings growth in Q3.
• Growth is expected to be strong for the Technology sector as well, with Tech earnings expected to be up +9.7% from the same period last year on +6.7% higher revenues.
• Q3 earnings growth is expected to be in negative territory for 7 of the 16 Zacks sectors, with double-digit declines for the Autos, Basic Materials, Aerospace, and Transportation sectors.
• For full-year 2017, total earnings for the S&P 500 index are expected to be up +7.4% on +4.6% higher revenues, which would follow +0.7% earnings growth on +2.1% higher revenues in 2016. Index earnings are expected to be up +11.1% in 2018 and +9.1% in 2019.
• Earnings growth is expected to turn positive in Q3 for the small-cap S&P 600 index, with total earnings for the index expected to be up +11.2% 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 +0.4% (from +11.2%) on an ex-Finance basis.
We are still a couple of weeks away from bank earnings results that now serve as the unofficial starting point of the quarterly reporting cycle since Alcoa (NYSE: (AA - Free Report) – Free Report) relinquished that role following its split. Officially, however, the reporting cycle has gotten underway, with results from 13 S&P 500 members already out at this stage. A number of these early reports have been on the weak side, particularly from Oracle (NYSE: (ORCL - Free Report) – Free Report), Adobe (Nasdaq: (ADBE - Free Report) – Free Report), General Mills (NYSE: (GIS - Free Report) – Free Report) and others. But this is way too small a sample of results from which to draw any preliminary conclusions. We will have Q3 results from almost two dozen S&P 500 members by the time the bank results start rolling in. These early reporters will be releasing results for their fiscal quarters ending in August, but those results get counted as part of our Q3 tally.
Estimates for Q3 have come down since the quarter got underway, with the current +3.2% expected earnings growth down from +6.3% in late June.
We know from history that actual Q3 earnings growth will be a lot higher than what is expected at present, with the final growth tally for the quarter likely in the vicinity of what was expected at the start of the quarter (+6.3%). But whatever the final growth tally for Q3 turns out to be, it is unlikely to surpass what was achieved in the preceding two earnings seasons. 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.
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: Alcoa, Oracle, Adobe, General Mills
For Immediate Release
Chicago, IL – September 28, 2017 – Zacks Director of Research Sheraz Mian says, “Total Q3 earnings for the S&P 500 index are expected to be up +3.2% from the same period last year on +5% higher revenues.”
Start of Q3 Earnings Season
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:
• The Q3 earnings season wouldn’t take the spotlight for a couple of more weeks, but the earnings season has officially gotten underway already as companies with fiscal quarters ending in August have started reporting results.
• Total Q3 earnings for the S&P 500 index are expected to be up +3.2% from the same period last year on +5% higher revenues. This would follow double-digit earnings growth in each of the preceding two quarters.
• As has been the trend in recent years, estimates for Q3 have come down since the quarter got underway, but the magnitude of negative revisions compares favorably to other recent periods.
• Earnings growth for Q3 drops to +1.3% (from +3.2%) when the strong Energy sector contribution is excluded from the aggregate picture. The Conglomerates sector is the only other sector, in addition to Energy, with double-digit earnings growth in Q3.
• Growth is expected to be strong for the Technology sector as well, with Tech earnings expected to be up +9.7% from the same period last year on +6.7% higher revenues.
• Q3 earnings growth is expected to be in negative territory for 7 of the 16 Zacks sectors, with double-digit declines for the Autos, Basic Materials, Aerospace, and Transportation sectors.
• For full-year 2017, total earnings for the S&P 500 index are expected to be up +7.4% on +4.6% higher revenues, which would follow +0.7% earnings growth on +2.1% higher revenues in 2016. Index earnings are expected to be up +11.1% in 2018 and +9.1% in 2019.
• Earnings growth is expected to turn positive in Q3 for the small-cap S&P 600 index, with total earnings for the index expected to be up +11.2% 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 +0.4% (from +11.2%) on an ex-Finance basis.
We are still a couple of weeks away from bank earnings results that now serve as the unofficial starting point of the quarterly reporting cycle since Alcoa (NYSE: (AA - Free Report) – Free Report) relinquished that role following its split. Officially, however, the reporting cycle has gotten underway, with results from 13 S&P 500 members already out at this stage. A number of these early reports have been on the weak side, particularly from Oracle (NYSE: (ORCL - Free Report) – Free Report), Adobe (Nasdaq: (ADBE - Free Report) – Free Report), General Mills (NYSE: (GIS - Free Report) – Free Report) and others. But this is way too small a sample of results from which to draw any preliminary conclusions. We will have Q3 results from almost two dozen S&P 500 members by the time the bank results start rolling in. These early reporters will be releasing results for their fiscal quarters ending in August, but those results get counted as part of our Q3 tally.
Estimates for Q3 have come down since the quarter got underway, with the current +3.2% expected earnings growth down from +6.3% in late June.
We know from history that actual Q3 earnings growth will be a lot higher than what is expected at present, with the final growth tally for the quarter likely in the vicinity of what was expected at the start of the quarter (+6.3%). But whatever the final growth tally for Q3 turns out to be, it is unlikely to surpass what was achieved in the preceding two earnings seasons. 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.
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.