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Looking Ahead to the Q1 Earnings Season

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For most folks, earnings season means the 4 to 6 week period at the end of each calendar quarter when announcements of quarterly earnings releases dominate market headlines. For folks like us, however, who have to monitor and record each and every earnings release, the definition and duration of each earnings season isn’t that simple. Take for example, the 161 companies coming out with quarterly results this week, including 4 S&P 500 members.

Since we are still a couple of weeks away from the end of the March quarter, most folks would assume that all of these reports represent the tail of the 2016 Q4 earnings season. But that’s not correct; not all of this week’s earnings releases fall in the Q4 bucket. In fact, a number of this week’s earnings releases form part of the Q1 earnings season. For example, the Oracle (ORCL) report after the market’s close on Wednesday is for that company’s fiscal quarter that ended in February, which will form part of our Q1 earnings tally. The Adobe (ADBE - Free Report) report after the close on Thursday similarly becomes part of the Q1 bucket.

That said, most of this week’s 161 earnings releases do represent the tail of the Q4 reporting cycle. The chart below of weekly reporting calendar for the S&P 500 index clearly shows that we still have another four weeks to go before the Q1 earnings season really takes off.

Expectations for Q1

Total Q1 earnings are expected to be up +6.6% from the same period last year on +6.5% higher revenues. This would follow +7.4% earnings growth in 2016 Q4 on +3.7% revenue growth, the highest growth pace in all most two years.

Estimates for Q1 came down as the quarter unfolded, with the current +6.6% growth down from +10.4% at the end of December. The chart below shows how Q1 earnings growth expectations have evolved over the last three months.

Please note that while Q1 estimates have followed well traversed path that we have been seeing consistently over the last few years, the magnitude of negative revisions compares favorably to other periods. In other words, Q1 estimates have come down, but they haven’t come down by as much.

The table below shows the summary picture for Q1, contrasted with what was actually achieved in Q4 (please note that we have officially closed the books on Q4 yet, as 4 index members still have to report quarterly results).

Recap of the Q4 Earnings Season

We now have Q4 results from 495 S&P 500 members, or 99% of the index’s total membership. Total earnings for these 495 index members are up +7.5% on +4.8% higher revenues, with 68.5% beating EPS estimates and 54.5% coming ahead of top-line expectations. For the quarter as a whole (combining estimates for the still-to-come 4 index members with what has come out already), total Q4 earnings are on track to be up +7.4% from the same period last year on +3.7% higher revenues.

Any way you look at it, the Q4 earnings season turned out to be a good one. Not only has growth turned out to be the highest in two years, but total earnings for the quarter also reached a new quarterly record. Please recall that earnings growth turned positive only in 2016 Q3, having declined in each of the preceding 5 quarters, as the chart below of year-over-year earnings growth for the S&P 500 index shows.

Importantly, the positive Q4 growth wasn’t a result of easy comparisons, but actually a function of strong gains in earnings. In fact, the overall tally of Q4 earnings for the S&P 500 index is on track to reach an all-time record for the index, surpassing the previous record achieved in 2014 Q4. The chart below shows the quarterly earnings totals for index, contrasting the highlighted Q4 tally with actual results from the last 8 quarters and expected tallies in the coming 4 quarters.

As you can see, this record isn’t expected to last very long, with growth expected to ramp up notably in the coming quarters.

The chart below shows the Q3 earnings growth contrasted with declines in the preceding 5 quarters. As you can see in the chart below, the growth pace is expected to ramp up in 2017.

The market is reflecting this improved earnings backdrop as the chart below of the S&P 500 relative to forward 12-month Zacks Consensus estimates shows.

Note: Sheraz Mian heads the Zacks Equity Research department and is a well-regarded expert of aggregate earnings. He is frequently quoted in the print and electronic media and publishes the weekly Earnings Trends and Earnings Preview reports. If you want an email notification each time Sheraz publishes a new article, click here>>>

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Here is a list of the 161 companies including 4 S&P 500 members reporting this week.

Company Ticker Current Qtr Year-Ago Qtr Last EPS Surprise % Report Day Time
TURNING PT BRNDTPB0.31N/A-12.82%MondayBTO
KOPIN CORPKOPN-0.11-0.1114.29%MondayBTO
ADAPTIMMUNE THRADAP-0.29-0.1311.11%MondayBTO
TOWNSQAR MEDIATSQ0.250.090.00%MondayBTO
HUTCHISN CH-ADRHCM-0.06N/AN/AMondayBTO
NOBILIS HEALTHHLTH0.360.27-112.50%MondayBTO
LEJU HOLDINGSLEJU-0.230.11-16.67%MondayBTO
SUPERCOM LTDSPCBN/A0.03-500.00%MondayBTO
DEL TACO RSTRNTTACO0.2N/A8.33%MondayBTO
GENER8 MARITIMEGNRT0.180.59-125.00%MondayBTO
MINERVA NEUROSCNERV-0.25-0.34-4.35%MondayBTO
KMG CHEMICALSKMG0.420.46.67%MondayAMC
INTER PARFUMSIPAR0.120.066.12%MondayAMC
ARATANA THERAPPETX-0.43-0.3720.83%MondayAMC
TILLYS INCTLYS0.210.1120.00%MondayAMC
TABULA RASA HLTTRHC0.11N/A33.33%MondayAMC
EXTRACTION O&GXOG-0.16N/AN/AMondayAMC
PEREGRINE PHARMPPHM-0.03-0.0833.33%MondayAMC
RESEARCH FRNTRSREFR-0.01-0.0850.00%MondayAMC
REAL INDUSTRYRELY-0.37-0.15-185.71%MondayAMC
TRIPLEPOINT VENTPVGN/A0.3614.29%MondayAMC
CRAFT BREW ALLNBREW0.090.07-81.25%MondayAMC
COHERUS BIOSCCHRS-1.63-1.35205.70%MondayAMC
COUPA SOFTWARECOUP-0.21N/A-59.09%MondayAMC
ENZO BIOCHEMENZ-0.04-0.0740.00%MondayAMC
RESOURCE CAPITLRSO0.020.03-22.58%MondayAMC
BELLICUM PHARMBLCM-0.69-0.63-6.45%MondayAMC
INVESTORS RL ESIRET0.130.130.00%MondayAMC
LIMONEIRA COLMNR-0.18-0.290.00%MondayAMC
AMPHASTAR PHARMAMPHN/A0.160.00%MondayAMC
GOLDEN ENTMNTGDEN0.120.03-60.00%MondayAMC
RYERSON HOLDINGRYI-0.09-0.46-20.00%MondayAMC
READING INTLRDI0.080.141500.00%MondayN/A
NEOS THERAPTCSNEOS-1.42-0.570.00%TuesdayBTO
DSW INC CL-ADSW0.160.144.08%TuesdayBTO
COBALT INTL EGYCIE-0.13-0.17-20.00%TuesdayBTO
HD SUPPLY HLDGSHDS0.440.271.22%TuesdayBTO
CUI GLOBAL INCCUI-0.07-0.0466.67%TuesdayBTO
ENERNOC INCENOC-1.13-1.1400.00%TuesdayBTO
RADNET INCRDNT0.110.07-63.64%TuesdayBTO
ALLIED MOTN TECAMOT0.190.07-15.63%TuesdayBTO
AURIS MEDICALEARS-0.28-0.1617.86%TuesdayBTO
TRANSMONTN PTNRTLPN/A0.618.37%TuesdayBTO
VERITIV CORPVRTV0.740.88-72.36%TuesdayBTO
ADV EMISSIONSADES0.57-0.13N/ATuesdayBTO
ALBIREO PHARMAALBO-0.88-1.5N/ATuesdayBTO
AMPCO-PITTSBRGHAP-0.34-0.27N/ATuesdayBTO
BIO-PATH HLDGSBPTH-0.03-0.020.00%TuesdayBTO
NEXPOINT REITNXRT0.360.34-3.03%TuesdayBTO
PATRIOT NATIONLPN0.120.12-73.91%TuesdayBTO
TRINITY BIOTECHTRIB-2.580.0816.67%TuesdayBTO
WALTER INV MGMTWAC-0.53-0.32-185.71%TuesdayBTO
YY INC-ADRYY1.050.9626.76%TuesdayBTO
CLEARSIDE BIOCLSD-0.34N/A37.78%TuesdayBTO
CELLDEX THERAPTCLDX-0.34-0.339.38%TuesdayAMC
CHEMOCENTRYXCCXI0.07-0.26-414.29%TuesdayAMC
ACHOGEN INCAKAO-0.47-0.6125.45%TuesdayAMC
FOGO DE CHAOFOGO0.270.296.67%TuesdayAMC
ARENA PHARMAARNA-0.09-0.1328.57%TuesdayAMC
CONNECTURE INCCNXR0.220.19-50.00%TuesdayAMC
INFINITY PHARMAINFI-0.56-0.853.57%TuesdayAMC
PTC THERAPEUTICPTCT-0.99-1.514.88%TuesdayAMC
RESOLUTE ENERGYREN0.8-0.75-367.86%TuesdayAMC
RUBICON PROJECTRUBIN/A0.54575.00%TuesdayAMC
TRITON INTL LTDTRTN0.260.51-100.00%TuesdayAMC
EVERI HOLDINGSEVRI-0.20.085.88%TuesdayAMC
KEANE GROUP INCFRAC-0.32N/AN/ATuesdayAMC
ROSETTA STONERSTN/A-0.2662.50%TuesdayAMC
SIENTRA INCSIEN-0.52-0.780.00%TuesdayAMC
HOSTESS BRANDSTWNK0.13N/AN/ATuesdayAMC
NEOPHOTONICS CPNPTN0.030.11-200.00%TuesdayAMC
KURA ONCOLOGYKURA-0.39-0.429.76%TuesdayAMC
FTD COS INCFTDN/A0.4550.00%TuesdayAMC
CHINA LODGINGHTHT0.230.1710.71%TuesdayAMC
RWE AG -SP ADRRWEOYN/AN/AN/ATuesdayN/A
PRUDENTIAL PLCPUKN/AN/AN/ATuesdayN/A
TITAN INTL INCTWI-0.08-0.38-38.46%WednesdayBTO
VOYAGER THERAPTVYGR-0.43-0.6714.63%WednesdayBTO
ACLARIS THERAPTACRS-0.59-0.2826.47%WednesdayBTO
AIMMUNE THERAPTAIMT-0.46-0.39-20.45%WednesdayBTO
ABRAXAS PETE/NVAXAS-0.01-0.0250.00%WednesdayBTO
SITEONE LANDSCPSITEN/AN/A-14.29%WednesdayBTO
HARVEST CAP CRDHCAP0.40.5438.24%WednesdayBTO
NEONODE INCNEON-0.01-0.06-400.00%WednesdayBTO
OFS CAPITAL CRPOFS0.350.46-8.11%WednesdayBTO
BAVARIAN NORDICBVNRY0.170N/AWednesdayBTO
BELLATRIX EXPLRBXE-0.05-0.0316.67%WednesdayBTO
CHRISTOPHER&BNKCBK-0.45-0.2480.00%WednesdayBTO
CONCORDIA INTLCXRXN/A1.08-132.04%WednesdayBTO
GTX INCGTXI-0.57-0.60.00%WednesdayBTO
PENN WEST EGYPWEN/A-1.73-27.27%WednesdayBTO
E.ON AG-ADREONGYN/AN/AN/AWednesdayBTO
ORACLE CORPORCL0.570.590.00%WednesdayAMC
PAPA MURPHYS HLFRSH0.010.12-160.00%WednesdayAMC
INOVIO PHARMACINO-0.29-0.25-7.69%WednesdayAMC
LATAM AIRLINESLFL0.110.05-60.00%WednesdayAMC
PRIMO WATER CPPRMW-0.330.020.00%WednesdayAMC
TROVAGENE INCTROV-0.29-0.27-6.25%WednesdayAMC
WILLIAMS-SONOMAWSM1.521.552.60%WednesdayAMC
RING ENERGY INCREI0.02-0.05100.00%WednesdayAMC
ALARM.COM HLDGSALRM0.120.1360.00%WednesdayAMC
ATHENE HOLDINGATH1.16N/AN/AWednesdayAMC
CATALYST PHARMACPRX-0.07-0.0716.67%WednesdayAMC
EVOKE PHARMAEVOK-0.16-0.3711.11%WednesdayAMC
GUESS INCGES0.420.57-21.43%WednesdayAMC
AVID TECH INCAVID0.150.090.00%WednesdayAMC
CORINDUS VASCLRCVRS-0.08-0.06-16.67%WednesdayAMC
CONTANGO OIL&GSMCF-0.23-2.19-161.90%WednesdayAMC
AETERNA ZENTARSAEZS-0.85-1.4617.57%WednesdayAMC
AROTECH CORPARTX0.020.05700.00%WednesdayAMC
MAGICJACK VOCTCCALL0.150.29109.09%WednesdayAMC
CAPRICOR THERAPCAPR-0.24-0.21-7.41%WednesdayAMC
GRIDSUM HOLDINGGSUM0N/A-288.89%WednesdayAMC
HERITAGE INSURHRTG-0.220.66-13.95%WednesdayAMC
JABIL CIRCUITJBL0.360.4618.97%WednesdayAMC
KLONDEX MINESKLDXN/A0.0533.33%WednesdayAMC
PFENEX INCPFNX-0.68-0.37343.33%WednesdayAMC
PENN VA CPPVAC0.3N/AN/AWednesdayAMC
SHARPSPRING INCSHSP-0.12-0.54-25.00%WednesdayAMC
SYNACOR INCSYNC-0.1-0.01N/AWednesdayAMC
YIRENDAI LTDYRD-0.030.25750.00%WednesdayAMC
CONATUS PHARMACNAT-0.32-0.36.06%WednesdayAMC
PRIMERO MININGPPPN/A0-500.00%WednesdayN/A
DOLLAR GENERALDG1.411.3-3.26%ThursdayBTO
CELSION CORPCLSN-0.19-0.24-21.05%ThursdayBTO
B2GOLD CORPBTG0.03025.00%ThursdayBTO
HISTOGENICS CPHSGX-0.47-0.6317.74%ThursdayBTO
MEDLEY MGMT INCMDLY0.160.14-12.50%ThursdayBTO
PROTALIX BIOTHRPLX-0.11N/A30.00%ThursdayBTO
PATHEON NVPTHN0.2N/A17.14%ThursdayBTO
US PHYSICAL THRUSPH0.470.48-6.12%ThursdayBTO
HEIDELBERGCEMNTHDELYN/AN/A30.00%ThursdayBTO
JA SOLAR HOLDGSJASO-0.070.5400.00%ThursdayBTO
LIGHTINTHEBOX-ALITB0.010.110.00%ThursdayBTO
XBIOTECH INCXBIT-0.42-0.3717.39%ThursdayBTO
KARYOPHARM THERKPTI-0.65-0.8113.75%ThursdayBTO
INSYS THERAPINSY-0.050.2220.00%ThursdayBTO
OSISKO GOLD LTDOR0.060.0933.33%ThursdayBTO
LUFTHANSA -ADRDLAKYN/AN/AN/AThursdayBTO
RENTECH INCRTKN/A-0.48-121.05%ThursdayBTO
ADOBE SYSTEMSADBE0.720.5215.28%ThursdayAMC
CALERES INCCAL0.40.26-1.22%ThursdayAMC
SMART SAND INCSND0.5N/A-100.00%ThursdayAMC
BIOAMBER INCBIOA-0.19-0.4-18.18%ThursdayAMC
FATE THERAPEUTCFATE-0.29-0.263.57%ThursdayAMC
CATABASIS PHARMCATB-0.49-0.6316.92%ThursdayAMC
VIVINT SOLARVSLR-0.42-0.521.74%ThursdayAMC
EXONE CO/THEXONE-0.04-0.08-27.78%ThursdayAMC
EXA CORPEXA-0.04-0.1125.00%ThursdayAMC
AQUAVENTURE HLDWAAS-0.19N/AN/AThursdayAMC
WESTMORELAND COWLB1.15-1.06-239.39%ThursdayAMC
BIOTIME INCBTX-0.18-0.1660.00%ThursdayAMC
CUMULUS MEDIACMLS-0.61-0.48-737.50%ThursdayAMC
FUTUREFUEL CORPFFN/A0.6820.83%ThursdayAMC
GSV CAPITAL CPGSVCN/A-0.24N/AThursdayAMC
LUNA INNOVATIONLUNA0-0.02-100.00%ThursdayAMC
TPI COMPOSITESTPIC-0.09N/A200.00%ThursdayAMC
TIFFANY & COTIF1.371.4613.43%FridayBTO
BIODELIVERY SCIBDSI-0.270.2-15.38%FridayBTO
VUZIX CORPVUZI-0.15-0.24-60.00%FridayBTO
TSAKOS EGY NAVGTNP0.060.41-100.00%FridayBTO

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