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Zacks Earnings Trends Highlights: Microsoft, Apple, Google, Amazon and Facebook
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For Immediate Release
Chicago, IL – August 5, 2021 – Zacks Director of Research Sheraz Mian says, “The picture emerging from the Q2 earnings season is one of all-around strength, with aggregate total quarterly earnings on track to reach a new all-time record and impressive momentum on the revenue side.
For the 378 S&P 500 members that have reported Q2 results already, total earnings are up +103.8% on +28.2% higher revenues, with 87.3% beating EPS estimates and 86.5% topping revenue estimates.
While the outsized earnings growth pace is mostly due to easy comparisons, primarily in the Finance sector, the performance on the revenue front (growth rate as well as beats percentage) is tracking above what we have been seeing in other recent periods.
For the Tech sector, now have Q2 results from 85.1% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Tech companies are up +66% from the same period last year on +26.3% higher revenues, with 96.2% beating EPS estimates and 94.3% beating revenue estimates.
For the Finance sector, now have Q2 results from 82.6% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Finance companies are up +179.4% from the same period last year on +8.5% higher revenues, with 92.7% beating EPS estimates and 81.7% beating revenue estimates.
Excluding the unusually high Finance sector earnings growth, total Q2 earnings growth for the remainder of the index members that have reported results would be up +88.6% on +31.6% higher revenues.
Looking at Q2 as a whole, combining the actual results for the 378 index members that have reported with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up +89.7% from the same period last year on +23.5% higher revenues, with the growth rate steadily going up as companies report better-than-expected results.
Looking at the calendar-year picture for the S&P 500 index, earnings are projected to climb +41.7% on +12.4% higher revenues in 2021 and increase +9.7% on +6.5% higher revenues in 2022. This would follow a decline of -1.7% in 2020.
The implied ‘EPS’ for the S&P 500 index, calculated using the current 2021 P/E of 23.1X and index close, as of August 3rd, is $191.77, up from $135.38 in 2020. Using the same methodology, the index ‘EPS’ works out to $210.47 for 2022 (P/E of 21.0X). The multiples have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
We pointed out last week how the market was unimpressed with the strong Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) earnings releases, but liked the Alphabet (GOOGL - Free Report) report. We have since seen results from Amazon (AMZN - Free Report) and Facebook as well, with the market’s reaction more in-line with how it responded to the Microsoft release.
The big 5 Tech companies – Apple, Microsoft, Alphabet, Amazon and Facebook –combined earned +88% more in Q2 on +35.4% higher revenues relative to the same period last year.
If one were to look for ‘negatives’ in the above picture, it would probably be the coming period of deceleration in the group trend. But given the very positive revisions trend currently in place, I would hazard that estimates for the coming periods will most likely get revised higher.
These are growth rates typically associated with start-ups and much younger companies, not seasoned operators like Microsoft and Co.
Estimates for the current period (2021 Q3) are steadily going up, and we remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving, with the revisions trend accelerating in the back half of the year.”
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.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performance for information about the performance numbers displayed in this press release.
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Zacks Earnings Trends Highlights: Microsoft, Apple, Google, Amazon and Facebook
For Immediate Release
Chicago, IL – August 5, 2021 – Zacks Director of Research Sheraz Mian says, “The picture emerging from the Q2 earnings season is one of all-around strength, with aggregate total quarterly earnings on track to reach a new all-time record and impressive momentum on the revenue side.
For the 378 S&P 500 members that have reported Q2 results already, total earnings are up +103.8% on +28.2% higher revenues, with 87.3% beating EPS estimates and 86.5% topping revenue estimates.
While the outsized earnings growth pace is mostly due to easy comparisons, primarily in the Finance sector, the performance on the revenue front (growth rate as well as beats percentage) is tracking above what we have been seeing in other recent periods.
For the Tech sector, now have Q2 results from 85.1% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Tech companies are up +66% from the same period last year on +26.3% higher revenues, with 96.2% beating EPS estimates and 94.3% beating revenue estimates.
For the Finance sector, now have Q2 results from 82.6% of the sector’s market capitalization in the S&P 500 index. Total earnings for these Finance companies are up +179.4% from the same period last year on +8.5% higher revenues, with 92.7% beating EPS estimates and 81.7% beating revenue estimates.
Excluding the unusually high Finance sector earnings growth, total Q2 earnings growth for the remainder of the index members that have reported results would be up +88.6% on +31.6% higher revenues.
Looking at Q2 as a whole, combining the actual results for the 378 index members that have reported with estimates for the still-to-come companies, total S&P 500 earnings are expected to be up +89.7% from the same period last year on +23.5% higher revenues, with the growth rate steadily going up as companies report better-than-expected results.
Looking at the calendar-year picture for the S&P 500 index, earnings are projected to climb +41.7% on +12.4% higher revenues in 2021 and increase +9.7% on +6.5% higher revenues in 2022. This would follow a decline of -1.7% in 2020.
The implied ‘EPS’ for the S&P 500 index, calculated using the current 2021 P/E of 23.1X and index close, as of August 3rd, is $191.77, up from $135.38 in 2020. Using the same methodology, the index ‘EPS’ works out to $210.47 for 2022 (P/E of 21.0X). The multiples have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
We pointed out last week how the market was unimpressed with the strong Microsoft (MSFT - Free Report) and Apple (AAPL - Free Report) earnings releases, but liked the Alphabet (GOOGL - Free Report) report. We have since seen results from Amazon (AMZN - Free Report) and Facebook as well, with the market’s reaction more in-line with how it responded to the Microsoft release.
The big 5 Tech companies – Apple, Microsoft, Alphabet, Amazon and Facebook –combined earned +88% more in Q2 on +35.4% higher revenues relative to the same period last year.
If one were to look for ‘negatives’ in the above picture, it would probably be the coming period of deceleration in the group trend. But given the very positive revisions trend currently in place, I would hazard that estimates for the coming periods will most likely get revised higher.
These are growth rates typically associated with start-ups and much younger companies, not seasoned operators like Microsoft and Co.
Estimates for the current period (2021 Q3) are steadily going up, and we remain positive in our earnings outlook, as we see the full-year 2021 growth picture steadily improving, with the revisions trend accelerating in the back half of the year.”
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Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
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/performance for information about the performance numbers displayed in this press release.