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Tech Earnings Good, But Not Great

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With Q3 results from 91% of S&P 500 index members already out, this earnings season is pretty much behind us now, with the Retail sector as the only area that has a significant number of reports still to come. Total earnings for these companies are up +26.2% from the same period last year on +8.8% higher revenues, with 78.5% beating EPS estimates and 63.5% beating revenue estimates.

For the Tech sector, we now have Q3 results from 78.5% of the sector companies in the S&P 500 index. Total earnings for these Tech companies are up +27.7% from the same period last year on +13.2% higher revenues, with 92.2% beating EPS estimates and 64.7% beating revenue estimates.

The comparison charts below put these Tech sector results in a historical context

As you can see, the earnings growth pace is tracking below what we had seen from the same group of Tech companies in the preceding period and is about in-line with historical periods. Other metrics like EPS beats and revenue growth is similarly in-line with historical periods. But revenue beats are significantly below other recent periods, as has been the trend in the Q3 earnings season as a whole.

Apple (AAPL - Free Report) has been under the cloud ever since its earnings release, with many in the market seeing a less than positive demand trajectory for its products. Other Tech players, particularly in the semiconductor industry, have been facing similar type of headwinds.

For a detailed look at the Q3 earnings season, please check out our weekly Earnings Trends report >>> Taking Stock of the Q3 Earnings Season

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