For Immediate Release
Chicago, IL – July 31, 2017 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Apple (NASDAQ:AAPL – Free Report), Pfizer (NYSE:PFE – Free Report) and Yum Brands (NYSE:YUM – Free Report).
To see more earnings analysis, visit https://at.zacks.com/?id=3207.
Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here.
Q2 Earnings Season Past the Halfway Mark
The Q2 earnings season, which has crossed the half-way mark already, reconfirms the positive earnings picture that emerged as a result of the preceding reporting cycle.
The key positive aspects of this earnings season that we have been pointing out all long include broad-based growth, record earnings tally, an abundance of positive surprises and favorable trends on the revisions front. Plenty of reports are still to come – more than 1000 companies are on deck to come out with results this week, including 130 S&P 500 members – but the positive and reassuring view of corporate earnings that we have seen already will likely remain in place.Apple (NASDAQ:AAPL – Free Report), Pfizer (NYSE:PFE – Free Report) and Yum Brands (NYSE:YUM – Free Report) are some of the major reports coming out this week.
Here are the four takeaways from the results that have come out already.
First, the earnings and revenue growth pace is steadily going up relative to pre-season expectations. Total Q2 earnings for the index are currently expected to be up +9.2% from the same period last year on +5.0% higher revenues.
Please note that the +9.2% growth rate is the blended growth rate; it combines the actual growth for the 286 S&P 500 members that have reported with estimates for the still-to-come 214 index members. At the start of the quarter, the expectation was for earnings growth of +7.9%, which came down as the quarter unfolded, reaching as low as +5.6% just ahead of the start of the reporting season.
Since plenty of results are still to come, the actual Q2 earnings growth could very well go above +10%, which will follow the +13.3% earnings growth in the preceding quarter.
The deceleration in Q2 earnings growth notwithstanding, the quarter’s earnings tally is on track to reach a new all-time quarterly record, surpassing the 2016 Q4 level, as you can see in the chart below.
This record isn’t expected to last very long, with each of the coming quarters expected to bring in ever bigger earnings tallies.
Second, an above-average proportion of companies are beating EPS and revenue estimates. We typically don’t give this factor a lot of weight in evaluating or assessing an earnings season since we all know that management teams are experts in managing expectations. Even then, the trend emerging in the Q2 earnings season is noteworthy for two reasons. First, estimates for the quarter had not fallen by as much as had historically been the case. Second, the proportion of positive revenue surprises, a much harder variable to manipulate relative to earnings, is really off the chart.
Third, Q2 growth is broad-based and not dependent on one or two sectors. There is strong growth contribution from the Finance, Technology and Energy sectors in Q2, but we have 12 of the 16 Zacks sectors on track to produce more earnings than the year-earlier period.
Fourth, estimates for the September quarter have started coming down, but the pace and magnitude of negative revisions compares favorably to other comparable periods. Total Q3 earnings are currently expected to be up +4.6% from the same period last year, down from +6.3% at the start of July.
This is a reassuring start on the revisions front, but we will have to see if this trend will remain in place through the rest of this earnings season.
Q2 Earnings Season Scorecard (as of Friday, July 28, 2017)
We now have Q2 results from 286 S&P 500 members that combined account for 68.8% of the index’s total market capitalization. Total earnings for these companies are up +11.3% from the same period last year on +6.1% higher revenues, with 74.5% beating EPS estimates and 69.2% beating revenue estimates.
As pointed out earlier, the proportion of companies beating EPS and revenue estimates is tracking above historical periods (right-hand chart). The earnings and revenue growth pace for these 286 companies is below what we had seen from the same sample of companies in Q1, but an improvement over other recent periods.
Q2 Expectations
Total Q2 earnings are expected to be up +9.2% from the same period last year on +5.0% higher revenues. This would follow +13.3% earnings growth in 2017 Q1 on +7.0% revenues growth, the highest growth pace in all most two years.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!Register for your free subscription to Profit from the Pros.
Get the full Report on AAPL - FREE
Get the full Report on PFE - FREE
Get the full Report on YUM - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
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/performancefor information about the performance numbers displayed in this press release.
Image: Bigstock
Apple, Pfizer and Yum Brands are part of Zacks Earnings Preview
For Immediate Release
Chicago, IL – July 31, 2017 – Zacks.com releases the list of companies likely to issue earnings surprises. This week’s list includes Apple (NASDAQ:AAPL – Free Report), Pfizer (NYSE:PFE – Free Report) and Yum Brands (NYSE:YUM – Free Report).
To see more earnings analysis, visit https://at.zacks.com/?id=3207.
Every day, Zacks.com makes their Bull Stock of the Day available, free of charge. To see it, click here.
Q2 Earnings Season Past the Halfway Mark
The Q2 earnings season, which has crossed the half-way mark already, reconfirms the positive earnings picture that emerged as a result of the preceding reporting cycle.
The key positive aspects of this earnings season that we have been pointing out all long include broad-based growth, record earnings tally, an abundance of positive surprises and favorable trends on the revisions front. Plenty of reports are still to come – more than 1000 companies are on deck to come out with results this week, including 130 S&P 500 members – but the positive and reassuring view of corporate earnings that we have seen already will likely remain in place.Apple (NASDAQ:AAPL – Free Report), Pfizer (NYSE:PFE – Free Report) and Yum Brands (NYSE:YUM – Free Report) are some of the major reports coming out this week.
Here are the four takeaways from the results that have come out already.
First, the earnings and revenue growth pace is steadily going up relative to pre-season expectations. Total Q2 earnings for the index are currently expected to be up +9.2% from the same period last year on +5.0% higher revenues.
Please note that the +9.2% growth rate is the blended growth rate; it combines the actual growth for the 286 S&P 500 members that have reported with estimates for the still-to-come 214 index members. At the start of the quarter, the expectation was for earnings growth of +7.9%, which came down as the quarter unfolded, reaching as low as +5.6% just ahead of the start of the reporting season.
Since plenty of results are still to come, the actual Q2 earnings growth could very well go above +10%, which will follow the +13.3% earnings growth in the preceding quarter.
The deceleration in Q2 earnings growth notwithstanding, the quarter’s earnings tally is on track to reach a new all-time quarterly record, surpassing the 2016 Q4 level, as you can see in the chart below.
This record isn’t expected to last very long, with each of the coming quarters expected to bring in ever bigger earnings tallies.
Second, an above-average proportion of companies are beating EPS and revenue estimates. We typically don’t give this factor a lot of weight in evaluating or assessing an earnings season since we all know that management teams are experts in managing expectations. Even then, the trend emerging in the Q2 earnings season is noteworthy for two reasons. First, estimates for the quarter had not fallen by as much as had historically been the case. Second, the proportion of positive revenue surprises, a much harder variable to manipulate relative to earnings, is really off the chart.
Third, Q2 growth is broad-based and not dependent on one or two sectors. There is strong growth contribution from the Finance, Technology and Energy sectors in Q2, but we have 12 of the 16 Zacks sectors on track to produce more earnings than the year-earlier period.
Fourth, estimates for the September quarter have started coming down, but the pace and magnitude of negative revisions compares favorably to other comparable periods. Total Q3 earnings are currently expected to be up +4.6% from the same period last year, down from +6.3% at the start of July.
This is a reassuring start on the revisions front, but we will have to see if this trend will remain in place through the rest of this earnings season.
Q2 Earnings Season Scorecard (as of Friday, July 28, 2017)
We now have Q2 results from 286 S&P 500 members that combined account for 68.8% of the index’s total market capitalization. Total earnings for these companies are up +11.3% from the same period last year on +6.1% higher revenues, with 74.5% beating EPS estimates and 69.2% beating revenue estimates.
As pointed out earlier, the proportion of companies beating EPS and revenue estimates is tracking above historical periods (right-hand chart). The earnings and revenue growth pace for these 286 companies is below what we had seen from the same sample of companies in Q1, but an improvement over other recent periods.
Q2 Expectations
Total Q2 earnings are expected to be up +9.2% from the same period last year on +5.0% higher revenues. This would follow +13.3% earnings growth in 2017 Q1 on +7.0% revenues growth, the highest growth pace in all most two years.
About Zacks
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978. The later formation of the Zacks Rank, a proprietary stock picking system; continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time!Register for your free subscription to Profit from the Pros.
Get the full Report on AAPL - FREE
Get the full Report on PFE - FREE
Get the full Report on YUM - FREE
Follow us on Twitter: https://twitter.com/zacksresearch
Join us on Facebook: https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
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.
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
support@zacks.com
https://www.zacks.com
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/performancefor information about the performance numbers displayed in this press release.