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Aggregate Estimates and Revisions
Earnings Growth Highlights
The Energy sector has the highest earnings growth rate (540.0%) of any sector. It is expected to earn $8.0B in Q2 2017, compared to earnings of $1.3B in Q2 2016. Five of the six sub-industries in the sector are anticipated to see higher earnings than a year ago. The Oil & Gas Storage & Transportation (24,355.4%) and Oil & Gas Equipment & Services (280.5%) sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to 343.3%.
The Information Technology sector has the second highest earnings growth rate (16.3%) of any sector. It is expected to earn $54.5B in Q2 2017, compared to earnings of $49.0B in Q2 2016. Eleven of the 13 sub-industries in the sector are anticipated to see higher earnings than a year ago. The Semiconductor Equipment (48.1%) and Semiconductors (37.2%) sub-industries have the highest EPS growth in the sector. If these sub-industries are removed, the growth rate declines to a decrease of 11.5%.
The Utilities sector has the lowest growth rate (-3.8%) of any sector. It is expected to earn $7.6B in Q2 2017, relative to earnings of $7.9B in Q2 2016. One of the four sub-industries in the sector are anticipated to see earnings decreases compared to Q2 2016, led by the Electric Utilities (-7.3%) sub-industry. If this sub-industry is removed, the growth rate improves to 5.9%.
StarMine Earnings Surprise Forecast Q2 2017
Looking forward to anticipated Q2 performance, we use StarMine’s SmartEstimate® to determine which companies in the S&P 500 are better poised to beat earnings estimates. The SmartEstimate® is a weighted average of analyst estimates, with more weight given to more recent estimates and more accurate analysts. Our studies have shown that when the SmartEstimate® differs significantly from the consensus (IBES Mean), the Predicted Surprise accurately predicts the direction of earnings surprises or further revisions 70% of the time. When significant Predicted Surprise for revenue is also present for the period, the accuracy improves to 78%.
Over the next two weeks, 323 S&P 500 companies are expected to report earnings. Of these companies, a positive surprise is expected from 20 companies. On the flip side, negative surprises are expected from 21 S&P 500 companies.
Exhibit 1: S&P 500: Positive Predicted Surprises for Q2 2017, Jul. 24- Aug. 4, 2017
Exhibit 2: S&P 500: Negative Predicted Surprises for Q2 2017, Jul. 24- Aug. 4, 2017
Please note: if you use our earnings data, please source Thomson Reuters I/B/E/S
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