We now have a clear picture of the Q3 earnings season, with results from 364 of the S&P 500 Index members already on board (as on Nov 2). Earnings of these companies (accounting for almost 79% of the index’s total market capitalization) are up 1.6% year over year, on 1.6% higher revenues.
Of the companies that have reported results, 72.3% have surpassed earnings estimates, with 54.7% coming ahead of revenue estimates. If this trend continues, it will likely paint an encouraging growth picture for the times to come.
After five consecutive quarters of earnings declines for the S&P 500 index, we are finally seeing a marginally positive overall growth trend for the index. On the whole, our latest data projects that the earnings for the S&P 500 companies are now on track to grow 2.4% from the year-ago period on 1.4% higher revenues. This is comparable to a decline of 2.9%, expected a few weeks ago. (For more details, read our latest Earnings Outlook article).
The technology sector is one of the sectors expected to chart positive earnings growth this quarter. Its earnings are on track to be up 2.6% in the quarter, on 1% lower sales compared with the last year. Of the tech companies that have reported already, 84.2% have surpassed EPS estimates and 71.1% have topped revenues expectations.
Let’s have a look at how some electronics companies within the sector, like Jack Henry & Associates Inc. (JKHY - Free Report) and Fabrinet (FN - Free Report) are poised, ahead of their scheduled announcements on Nov 7.
Jack Henry & Associates is a leading provider of integrated technology solutions and data processing services for financial institutions.
Jack Henry & Associates has had a robust earnings surprise history and boasts an average positive earnings surprise of 12.3% over the trailing four quarters, beating estimates all through. Last quarter, it had surpassed estimates by 32.5%.
However, our proven model does not conclusively show that the company is likely to beat on earnings in the to-be-reported quarter. Jack Henry & Associates presently has an Earnings ESP of 0.00% and a Zacks Rank #3 (Hold). The Zacks Consensus Estimate for the quarter is pegged at 70 cents.
Despite a favorable rank, the company’s 0.00% Earnings ESP makes surprise prediction inconclusive. Note that stocks with a Zacks Rank #1 (Strong Buy), or 2 (Buy) or 3 have a significantly higher chance of beating estimates. You can see the complete list of today’s Zacks #1 Rank stocks here.
JACK HENRY ASSC Price, Consensus and EPS Surprise
Fabrinet provides precision optical, electro-mechanical and electronic manufacturing services to original equipment manufacturers.
Fabrinet has a choppy earnings history, having missed estimates in two of the trailing four quarters, and beating only once, for an average negative surprise of 2.8%. In the last reported quarter, the company had missed earnings estimates by 8.3%.
Our proven model does not conclusively show that Fabrinet is likely to beat on earnings in the quarter. The company has an Earnings ESP of 0.00% and a Zacks Rank #3. The Zacks Consensus Estimate for the quarter is pegged at 64 cents. The company’s zero ESP makes surprise prediction inconclusive. Please check our Earnings ESP Filter that enables you to find stocks that are expected to come out with earnings surprises.
FABRINET Price, Consensus and EPS Surprise
Keep an eye on our full earnings articles to see how these players finally fared in quarter.
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