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Zacks Earnings Trends Highlights: Apple, Alphabet and Facebook
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For Immediate Release
Chicago, IL – May 3, 2018 – Director of Research Sheraz Mian says, “Total Q1 earnings for the 343 S&P 500 companies that have reported results already are up +24% from the same period last year on +9.5% higher revenues.”
All-Around Earnings Strength
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Total Q1 earnings for the 343 S&P 500 companies that have reported results already are up +24% from the same period last year on +9.5% higher revenues, with 78.4% beating EPS estimates and 75.8% beating revenue estimates.
Except for the proportion of these 343 index members beating revenue estimates, which is tracking below the preceding quarter’s level, performance in Q1 is better than what we have seen in other recent periods in terms of growth and positive EPS surprises.
Looking at Q1 as a whole, total earnings are expected to be up +23.1% from the same period last year on +8.6% higher revenues, the highest quarterly earnings growth pace in 7 years.
Earnings growth is expected to be in double-digit territory from the year-earlier level for 13 of the 16 Zacks sectors, including the Technology and Finance sectors. The Auto sector has the weakest growth of all 16 sectors, with +0.3% earnings growth on +1.4% higher revenues.
Net margins are expected to increase 1.4 percentage points from the year-earlier period, with Finance, Technology, Industrials, Energy and Construction driving most of the margin gains.
Energy sector earnings are expected to be up +71.9% from the same period last year on +13.9% higher revenues. Excluding the Energy sector, total S&P 500 earnings growth drops from +23.1% to +21.4%.
For full-year 2018, total earnings for the S&P 500 index are expected to be up +19.1% on +5.6% higher revenues. For full-year 2019, earnings are expected to be up +9.3% on +4.5% higher revenues.
The implied ‘EPS’ for the entire index, calculated using current 2018 P/E of 17.1X and index close, as of May 1st, is $152.60. Using the same methodology, the index ‘EPS’ works out to $166.84 for 2019 (P/E of 15.6X). The multiples for 2018 and 2019 have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
The key takeaways from this earnings season are coming up, but let’s get the updated scorecard first.
We now have Q1 results from 343 S&P 500 members, or 68.6% of the index’s total membership. Total earnings for these 343 S&P 500 members are up +24% from the same period last year on +9.5% higher revenues, with 78.4% beating EPS estimates and 75.8% beating revenue estimates. The proportion of S&P 500 members beating both Q1 EPS and revenue estimates is 64.1%.
What these comparisons show are:
The earnings growth rate (+24%) for these 343 index members is significantly higher than what we have been seeing from the same group of companies in other recent periods.
The Q1 revenue growth rate (+9.5%) represents an acceleration from all other periods in the chart.
The proportion of positive EPS beasts (78.4%) is modestly above what we saw in 2017 Q4 (78.1%), the 4-quarter average (76.4%) and 12-quarter average (72.8%).
Revenue beats for these 343 index members at 75.8% is the only metric that is tracking below what we had seen from the same group of companies in the preceding period, but it remains above other historical periods.
Apple (AAPL - Free Report) became the latest Tech giant to come out with earnings and revenue growth levels that are typically associated with much smaller companies. Apple’s March-quarter earnings are up +25.3% on +15.6% higher revenues, which follows Alphabet’s (GOOGL - Free Report) +23.5% and Facebook’s +49% revenue growth. Tech sector results have been very strong, with a record 92.1% sector companies beating estimates and total earnings on track to be up +28.4% on +12.6% higher revenues.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trendsand Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, pleaseclick here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>
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.
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: Apple, Alphabet and Facebook
For Immediate Release
Chicago, IL – May 3, 2018 – Director of Research Sheraz Mian says, “Total Q1 earnings for the 343 S&P 500 companies that have reported results already are up +24% from the same period last year on +9.5% higher revenues.”
All-Around Earnings Strength
Note: The following is an excerpt from this week’s Earnings Trends report. You can access the full report that contains detailed historical actual and estimates for the current and following periods, please click here>>>
Here are the key points:
Total Q1 earnings for the 343 S&P 500 companies that have reported results already are up +24% from the same period last year on +9.5% higher revenues, with 78.4% beating EPS estimates and 75.8% beating revenue estimates.
Except for the proportion of these 343 index members beating revenue estimates, which is tracking below the preceding quarter’s level, performance in Q1 is better than what we have seen in other recent periods in terms of growth and positive EPS surprises.
Looking at Q1 as a whole, total earnings are expected to be up +23.1% from the same period last year on +8.6% higher revenues, the highest quarterly earnings growth pace in 7 years.
Earnings growth is expected to be in double-digit territory from the year-earlier level for 13 of the 16 Zacks sectors, including the Technology and Finance sectors. The Auto sector has the weakest growth of all 16 sectors, with +0.3% earnings growth on +1.4% higher revenues.
Net margins are expected to increase 1.4 percentage points from the year-earlier period, with Finance, Technology, Industrials, Energy and Construction driving most of the margin gains.
Energy sector earnings are expected to be up +71.9% from the same period last year on +13.9% higher revenues. Excluding the Energy sector, total S&P 500 earnings growth drops from +23.1% to +21.4%.
For full-year 2018, total earnings for the S&P 500 index are expected to be up +19.1% on +5.6% higher revenues. For full-year 2019, earnings are expected to be up +9.3% on +4.5% higher revenues.
The implied ‘EPS’ for the entire index, calculated using current 2018 P/E of 17.1X and index close, as of May 1st, is $152.60. Using the same methodology, the index ‘EPS’ works out to $166.84 for 2019 (P/E of 15.6X). The multiples for 2018 and 2019 have been calculated using the index’s total market cap and aggregate bottom-up earnings for each year.
The key takeaways from this earnings season are coming up, but let’s get the updated scorecard first.
We now have Q1 results from 343 S&P 500 members, or 68.6% of the index’s total membership. Total earnings for these 343 S&P 500 members are up +24% from the same period last year on +9.5% higher revenues, with 78.4% beating EPS estimates and 75.8% beating revenue estimates. The proportion of S&P 500 members beating both Q1 EPS and revenue estimates is 64.1%.
What these comparisons show are:
The earnings growth rate (+24%) for these 343 index members is significantly higher than what we have been seeing from the same group of companies in other recent periods.
The Q1 revenue growth rate (+9.5%) represents an acceleration from all other periods in the chart.
The proportion of positive EPS beasts (78.4%) is modestly above what we saw in 2017 Q4 (78.1%), the 4-quarter average (76.4%) and 12-quarter average (72.8%).
Revenue beats for these 343 index members at 75.8% is the only metric that is tracking below what we had seen from the same group of companies in the preceding period, but it remains above other historical periods.
Apple (AAPL - Free Report) became the latest Tech giant to come out with earnings and revenue growth levels that are typically associated with much smaller companies. Apple’s March-quarter earnings are up +25.3% on +15.6% higher revenues, which follows Alphabet’s (GOOGL - Free Report) +23.5% and Facebook’s +49% revenue growth. Tech sector results have been very strong, with a record 92.1% sector companies beating estimates and total earnings on track to be up +28.4% on +12.6% higher revenues.
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trendsand Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>
Note: Sheraz Mian manages the Zacks equity research department. He is an acknowledged earnings expert whose commentaries and analyses appear on Zacks.com and in the print and electronic media. His weekly earnings related articles include Earnings Trends and Earnings Preview. He manages the Zacks Top 10 and Focus List portfolios and writes the Weekly Market Analysis article for Zacks Premium subscribers.
If you want an email notification each time Sheraz Mian publishes a new article, please click here>>>
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>
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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.