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Taking Stock of the Q3 Earnings season

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Less than impressive earnings results from Intel (INTC - Free Report) , IBM (IBM - Free Report) , and CSX Corp. (CSX - Free Report) after the close cap a busy earnings day that otherwise saw solid earnings reports from Goldman Sachs (GS - Free Report) , Johnson & Johnson (JNJ - Free Report) , and Mattel (MAT - Free Report) . While it’s still relatively early with only 53 S&P 500 results (as of Tuesday, October 16th), we are seeing a repeat performance of what we saw in the previous quarter when companies were finding it difficult to achieve revenue growth.

Here is an update of how the third quarter earnings season is shaping up (all data is as of the end of reports on Tuesday, October 16th).

•    Total earnings for the 53 S&P 500 companies that have already reported results are up 6.9% from the same period last year, with 60.4% of the companies beating expectations with a median surprise of 2.4%.

•    Total revenues for these same companies are up 5.6%, but only 37.5% of the companies have come ahead of revenue expectations.

•    The earnings growth rate for these companies is better than what these same companies in the second quarter – total earnings for these 53 companies were down 2.1% in the second quarter.

•    The early reports are predominantly weighted towards the large banks in the Finance sector, such as J.P. Morgan (JPM - Free Report) , Wells Fargo (WFC - Free Report) , and Citigroup (C - Free Report) . And earnings growth rates for the banks were all along expected be the best in the index.

•    Total earnings for the 12.7% of Finance companies that have reported results are up 22.2% from the same period last year. Please note that earnings from these 12.7% of Finance companies account for almost 40% of all third quarter earnings from the Finance sector.

•    Excluding Finance, total earnings for the companies that have already reported results will be down 1.3% from the same period last year.


Wednesday will be a busy reporting day as well, with more than 60 companies reporting results. The list includes 23 S&P 500 companies, including Pepsi (PEP - Free Report) , American Express (AXP - Free Report) , and eBay (EBAY - Free Report) .

The table below provides a summary of the companies still to report results in the coming days. Total earnings for these 447 companies, or 89.4% of the S&P members, are expected to be down 4.9% from the same period last year. Excluding Finance, total earnings are expected to be down 7.3%.

Each quarter, we see a majority of companies easily beat expectations on the earnings front. And the third quarter earnings season appears to be on track to be not much different from the norm on that count either, though it is running a shade lower relative to the last few quarters.

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