Thank you very much;
you're only a step away from
downloading your reports.
S&P 500 Revenue Trends Are Improving in Q2
Companies are reporting very solid revenues this earnings season.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

On Friday, FactSet updated its earnings stats for S&P 500 (INDEXSP:.INX) companies and there was a shocking surprise -- we are seeing a massive increase in companies beating sales expectations.

For the 74 companies that have reported second-quarter earnings, 73% have beaten consensus revenue estimates, up from 53% in Q1.

If this number can hold, it will be the highest such reading since FactSet began tracking this data point in Q3 2008, and it's way above the four-year average of 57.2%.

The beats themselves are also a larger magnitude than usual. Companies are reporting sales 1.43% above estimates versus the four-year average of 0.57%.

Health care, information technology, and financials are showing the biggest revenue growth increases relative to expectations, while energy and utilities are the notable underperformers.

Interestingly, in terms of price performance, energy and utilities have been the best sectors of 2014.

Unfortunately, the large percentage of beats hasn't moved the needle for Index-wide growth. As of June 30, estimated revenue growth was 3.0%, and current blended growth (which incorporates actual reports with estimates for companies that have not yet reported.)

However, that's not all bad news, because of the sector mix. On the plus side, tech and financials are levered to economic activity, and the big driver within health care is biotech, a growth industry.

And the underperformers, energy and utilities, in some ways represent burdens on individuals and businesses.

One quarter does not a trend make, but this is bad news for the bears.

This bull market is commonly knocked as being the result of cost cuts, share buybacks [subscription required] and dividends -- not genuine economic demand.

Low single-digital revenue growth isn't much to get excited about, but what if the demand side of the equation is being underestimated?

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
S&P 500 Revenue Trends Are Improving in Q2
Companies are reporting very solid revenues this earnings season.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

On Friday, FactSet updated its earnings stats for S&P 500 (INDEXSP:.INX) companies and there was a shocking surprise -- we are seeing a massive increase in companies beating sales expectations.

For the 74 companies that have reported second-quarter earnings, 73% have beaten consensus revenue estimates, up from 53% in Q1.

If this number can hold, it will be the highest such reading since FactSet began tracking this data point in Q3 2008, and it's way above the four-year average of 57.2%.

The beats themselves are also a larger magnitude than usual. Companies are reporting sales 1.43% above estimates versus the four-year average of 0.57%.

Health care, information technology, and financials are showing the biggest revenue growth increases relative to expectations, while energy and utilities are the notable underperformers.

Interestingly, in terms of price performance, energy and utilities have been the best sectors of 2014.

Unfortunately, the large percentage of beats hasn't moved the needle for Index-wide growth. As of June 30, estimated revenue growth was 3.0%, and current blended growth (which incorporates actual reports with estimates for companies that have not yet reported.)

However, that's not all bad news, because of the sector mix. On the plus side, tech and financials are levered to economic activity, and the big driver within health care is biotech, a growth industry.

And the underperformers, energy and utilities, in some ways represent burdens on individuals and businesses.

One quarter does not a trend make, but this is bad news for the bears.

This bull market is commonly knocked as being the result of cost cuts, share buybacks [subscription required] and dividends -- not genuine economic demand.

Low single-digital revenue growth isn't much to get excited about, but what if the demand side of the equation is being underestimated?

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
More From Michael Comeau
Daily Recap
S&P 500 Revenue Trends Are Improving in Q2
Companies are reporting very solid revenues this earnings season.
Michael Comeau    

This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+.

On Friday, FactSet updated its earnings stats for S&P 500 (INDEXSP:.INX) companies and there was a shocking surprise -- we are seeing a massive increase in companies beating sales expectations.

For the 74 companies that have reported second-quarter earnings, 73% have beaten consensus revenue estimates, up from 53% in Q1.

If this number can hold, it will be the highest such reading since FactSet began tracking this data point in Q3 2008, and it's way above the four-year average of 57.2%.

The beats themselves are also a larger magnitude than usual. Companies are reporting sales 1.43% above estimates versus the four-year average of 0.57%.

Health care, information technology, and financials are showing the biggest revenue growth increases relative to expectations, while energy and utilities are the notable underperformers.

Interestingly, in terms of price performance, energy and utilities have been the best sectors of 2014.

Unfortunately, the large percentage of beats hasn't moved the needle for Index-wide growth. As of June 30, estimated revenue growth was 3.0%, and current blended growth (which incorporates actual reports with estimates for companies that have not yet reported.)

However, that's not all bad news, because of the sector mix. On the plus side, tech and financials are levered to economic activity, and the big driver within health care is biotech, a growth industry.

And the underperformers, energy and utilities, in some ways represent burdens on individuals and businesses.

One quarter does not a trend make, but this is bad news for the bears.

This bull market is commonly knocked as being the result of cost cuts, share buybacks [subscription required] and dividends -- not genuine economic demand.

Low single-digital revenue growth isn't much to get excited about, but what if the demand side of the equation is being underestimated?

Twitter: @MichaelComeau

Follow the markets all day every day with a FREE 14 day trial to Buzz & Banter. Over 30 professional traders share their ideas in real-time. Learn more.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
EDITOR'S PICKS
 
WHAT'S POPULAR